Northport Securities Law Blog

The old adage "All boats float until the tide goes out" is aproproriate in these turbulent times. The market gyrations of last week will undoubtedly continue until the thick clouds of Cov-19 uncertainty clear up. The receding markets will expose portfolios that are subject to leverage and the resulting exponential loss of capital in a severe market downturn. For clients who are not speculators and unaware of the risk, the use of leverage in their portfolio may be unsuitable. Investors, who were exposed to this unsuitable risk through recommendations of their investment advisors, may have legitimate claims to recoup their losses. Particulary at risk are retirees or those approaching retirement who, through unsuitable use of margin or leveraged investments in managed accounts, lost irreplacable savings resulting from unsuitable recommendations or investment "strategies". For thirty years my law firm has recouped losses for investors who have been vicimized by their broker's unsuitable recommendations, unauthorized trading and improper use of leverage. 

Money is almost a universal concern among adults, but especially for the elderly who might be living on fixed incomes and limited retirement savings. New York scammers understand this all too well and use it to their advantage when committing securities fraud and elder financial abuse. These acts of fraud can -- and often do -- deplete much of the victims' life savings.

One example of this type of fraud involves an 86-year-old man who thought he had won two different multimillion dollar sweepstakes. But the people who told him about his lucky wins insisted that he had to pay the taxes for the winnings before they could hand over the money. His bank refused to allow him to send approximately $93,000 to the scammers, but he got around this by opening up another account. There were never any winning sweepstakes, and he lost all that money.

A former stockbroker recently went to trial after he pleaded not guilty to a number of serious charges. Charges for mail and wire fraud are just two of the 11 criminal counts. Investors in a state bordering New York say they suffered significant losses because of the broker's actions, which is sadly not an uncommon outcome of securities fraud.

The defendant worked in the securities industry for 15 years, during which time he was frequently considered one of the top brokers in the United States. Despite this reputation, he was fired on five different occasions. At no point was he forbidden from working in the industry.

There are many benefits to investing, including creating sources of passive income and building wealth. Aside from the many benefits there is a risk of losing money, but perhaps investment fraud is perhaps an even greater risk. Some investment advisers and brokers in New York are eager to take advantage of clients, sometimes defrauding them of hundreds of thousands of dollars.

An out-of-state financial adviser is facing 41 different criminal counts for illegally moving money out of clients' accounts and into his own personal ones. Those counts include charges for financial exploitation, investment adviser fraud and more. There were at least three clients who lost money, and the adviser's own father was apparently among the victims.