Northport Securities Law Blog

Men convicted of securities fraud sentenced to federal prison

On behalf of Timothy J. Dennin, P.C. posted in securities fraud on Friday, February 7, 2020.

Investors might not hear much about Ponzi schemes these days, but that does mean they are gone. In fact, many people are still running these investment schemes in New York. This form of securities fraud heaps huge losses on those who were led to believe that they were making sound investments.

Two men were recently sent to prison for wire fraud. Investigators say they committed that fraud while running an illegal Ponzi scheme that defrauded investors out of more than $22 million. Both men are 46 years old, and a judge sent one of them to federal prison for 240 months and sentenced the other to 136 months. Both must pay $9,103,088.12 in restitution. This comes out to a total of $18,206,176.24, several million shy of the $22 million they reportedly scammed from investors.

Former stockbroker on trial, accused of securities fraud

On behalf of Timothy J. Dennin, P.C. posted in securities fraud on Tuesday, February 4, 2020.

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.

New rule may allow more people to take part in pre-IPO investing

On behalf of Timothy J. Dennin, P.C. on Tuesday, January 14, 2020.

Pre-IPO investing has always been walled off from most Americans. Under longstanding rules, these stock purchases were generally limited to people deemed “accredited investors” – those with at least $1 million in assets outside the home, or an income of at least $200,000 annually.

2020, however, could see significant changes to the definition of an accredited investor, opening the door for more people to consider a pre-IPO investment.

Investment fraud victim secures $900,000 in damages

On behalf of Timothy J. Dennin, P.C. posted in securities fraud on Monday, January 13, 2020.

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.

3 Ways to recognize a pyramid scheme

On behalf of Timothy J. Dennin, P.C. on Friday, January 10, 2020.

A pyramid scheme is an investment scheme that requires investors to recruit new investors with the promise of being reimbursed with the money that those later investors contribute.

Unfortunately, many schemers manage to get away with running pyramid schemes because they operate under the guise of multi-level marketing practices. In New York, multi-level marketing practices are legal, but pyramid schemes are not.

Did my broker commit securities fraud?

On behalf of Timothy J. Dennin, P.C. posted in securities fraud on Monday, December 30, 2019.

There is no such thing as risk-free investing. This is why New York investors should be as informed as possible when deciding how and when to invest their money. Like many others, you probably trusted your broker to give you everything you needed to make an informed decision. However all too often "investment advisors" fail to fulfill this obligation. In this situation, unfortunately, he or she may have committed securities fraud.

Brokers are required to provide investors with all of the material facts related to an investment. This has to happen before handing over any money. Even if you trust your broker and think that he or she makes great decisions and recommendations, you cannot be certain whether a specific investment is the right choice for you until you have been given all information related to returns, risks and more.

The elderly are especially vulnerable to securities fraud

On behalf of Timothy J. Dennin, P.C. posted in securities fraud on Wednesday, December 18, 2019.

Although elder abuse might be more commonly associated with physical harm, financial exploitation is also quite common. Scams that target the elderly can take many forms, most of which are based on lies or half-truths. Securities fraud against this age group may only get worse as the number of New York residents who are over the age of 65 continues to grow.

The 2010 Elder Justice Act protects the elderly from financial exploitation. Financial exploitation includes things like using an elderly person's money for personal or monetary benefit, gain or profit. According to the National Center on Elder Abuse, these adults lose an estimated $2.9 billion to financial exploitation each and every year.

Ponzi and pyramid schemes are both examples of securities fraud

On behalf of Timothy J. Dennin, P.C. posted in securities fraud on Friday, November 29, 2019.

Pyramid schemes are often discussed as if they are a thing of the past, which is not the case. Pyramid schemes are often confused with Ponzi schemes. While similar and both can constitute forms of securities fraud, understanding the difference between these two schemes can help victims determine how to pursue possible compensation for their losses.

In New York, pyramid schemes are called chain-distribution schemes, which are illegal under state law. These schemes require investors to recruit even more investors -- many schemes request recruiting 10 more people -- below them, creating a downline of investors that ultimately looks like a pyramid. When people invest in the scheme, the money goes to investors higher up the chain, meaning those at the bottom never receive returns on their investments. Since continually recruiting more and more people is impossible, these schemes are unsustainable and rarely last long.

The right representation in Puerto Rico matters

On behalf of Timothy J. Dennin, P.C. posted in representation in puerto rico on Monday, November 18, 2019.

Laws differ from state to state, and how a claim is handled in New York might be quite different than how it might be treated elsewhere. This is why securing the guidance of someone who understands the laws applicable to a specific state or US Territory where the claim will be litigated is essential. When confrounted with securities litigation claims, finding the right representation in Puerto Rico is especially important.

Securities litigation is a complicated area of law, particularly because of the complexity of FINRA and SEC Rules and regulations as well as federal and state securities laws. Although an investor may lose money that does not necessarily mean that the investor has a legitimate claim. A thorough understanding the standards, rules and laws applicable to the securities industry is critical to evaluating whether you may have a legitimate claim to recover investment losses.

Some offenses may appear similar or even identical, but they are not. Understanding the nature of different offenses may help a victim of a securities violation better understand his or her situation.

5 Steps to avoid investment scams

On behalf of Timothy J. Dennin, P.C. on Monday, November 11, 2019.

Scammers operate at all hours of the day; they don't take vacations. Because of this, you always need to be skeptical of who assists you and your investment strategy. Also, be sure to secure your personal and financial information.

There are five necessary things you can do to make sure the broker, advisor, firm, etc. that you are working with is legit. Though they are essential, these guidelines are often overlooked.