Richmond, VA Investment Fraud Attorney

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Investment Fraud Attorneys

The law firm of Epperly & Follis, P.C. concentrates in cases against major defendants, including corporations and brokerage firms. Most stockbrokers are honest individuals who follow the rules of the securities industry, but unfortunately, there are some unethical and dishonest brokers.

Can You Trust Your Brokerage Firm or Stockbroker?

If you have invested in securities (stocks, bonds, options, limited partnerships, mutual funds, certain commodities, etc.) and you have experienced problems with your investments or your stockbroker, you may be the victim of securities fraud. Securities Fraud involves deceptive actions and schemes that are carried out to cheat or take advantage of investors. At Epperly & Follis, P.C., our attorneys are familiar with the financial damage that investor fraud can cause. You must know your rights so that you have the opportunity to recover your losses from your stockbroker or brokerage firm.

Couple who needs to hire an investment attorney in richmond va after reviewing their retirement funds

Can I Recover my Losses After Investment Fraud?

Most victims of securities fraud do not even realize that they have been defrauded until they have already suffered financial losses. Fortunately, even after losses have occurred, the law still provides a mechanism for investors to recover their losses which were caused by a stockbroker’s abuse of the account. Investors may be entitled to compensation for the loss of income that their investments should have been generating, interest on losses and legal fees.

How Investment Fraud Works

There are several ways in which an investor can be defrauded:

  • Churning, also known as Excessive Trading, occurs when a broker executes an excessive number of trades on an account in order to earn the commissions paid on each trade.
  • Unsuitability Trading and “Know Your Customer” Rules. Suitability rules in investing require that a broker make investment choices that they know are conducive to the needs of their client. Closely related are the “Know Your Customer” Rules, which require a broker to fully understand the wants and needs of their client. If your broker does not perform according to these rules, they may be liable for your losses.
  • Over-concentration occurs when the broker puts the majority of the client’s investment into one area, rather than diversifying the client’s portfolio, and then the value of the investment declines significantly.
  • Unauthorized Trading/Failure to Execute Order. An investor must approve each trade before the trade takes place. It is unethical to execute trades without the consent of the client. It is also the broker’s responsibility to execute trades in a timely fashion. If a broker executes a trade without your permission, or refuses or delays a sell order, you have a case for recovering your financial losses.
  • Investment Misrepresentation or Fraud occurs when a broker misrepresents a stock to the client, or omits vital information in order to encourage them to purchase certain stock. Stockbrokers who purposely omit information with the purpose of misleading their client are as liable as those who give false information to their clients. A broker has the responsibility to disclose all risks of a stock.
  • Insider Trading/Front Running. It is against the rules and regulations of the securities industry to enter into any securities transactions while in possession of nonpublic information. If your broker does this, they are breaking the law.
  • Touting is when a stockbroker misrepresents, or fails to disclose, material facts of a “house stock” that they are trying to sell to their client. If your broker performs in this way, they may be liable to you for your financial losses.

Signs of Investor Fraud

As an investor, you should be proactive, and always be aware of the actions your broker is taking when managing your account. There are several warning signs of fraud that you should look out for:

  • Inconsistency between the broker’s verbal statements and the performance of the investments.
  • Misrepresentations about an investment; failing to disclose risks.
  • Excessive trading on the account.
  • Trading in high risk, speculative or unsuitable investments.
  • Trading in securities and strategies without first properly educating the client.
  • Trading without proper and prior authorization.
  • Trading in low value securities or obscure companies on foreign exchanges, or private investments.
  • Unresponsive to complaints by the client.
  • Repeated promises by a broker to make up for losses.
  • The loss of funds or value of an account that the broker cannot explain.

What to Do If You Have Been Defrauded

If you think that you may have been defrauded, you should take immediate action to protect yourself and your investments. First, stop all trading with your broker until your concerns are resolved. Second, write a letter of complaint to your broker and his supervisor, or request a meeting with the brokerage firm manager. Finally, consult with a qualified attorney and have the account documents reviewed to determine whether you have been the victim of securities fraud. Epperly & Follis, P.C will outline the documentation required, the decisions that must be made, and will continue to guide you through the legal process.

It Is Time to Take Action

Epperly & Follis, P.C lawyers know the law and victims’ rights. We can help you make informed decisions regarding your situation. Our legal professionals do not approach our cases as mere jobs, but as causes in which larger issues are at stake – causes in which the firm’s lawyers invest personal dedication to see that justice is done. If you or someone you love has been a victim of securities fraud, please call the investment fraud law firm at Epperly & Follis, P.C. in Richmond, Virginia at 1-888-703-0109 or (804) 648-6480, or contact us via our online Contact Form.

Frequently Asked Questions

What is investment fraud?

Investment brokers may commit fraud in an effort to control the market or lure more business in. The following activities are considered investment fraud when done intentionally:

  • giving biased investment advice
  • giving unfounded advice
  • offering separate clients contradicting advice
  • advising clients to continue an imprudent risk
  • advising out of a conflict of interest
What is corporate fraud?

When a corporation deliberately conceals information to appear healthy and successful before its shareholders, it has committed corporate or shareholder fraud. Corporate fraud may involve a few individuals or many, depending on the extent to which employees are informed of their company’s financial practices. Fraud committed by corporations can be devastating, not only for outside investors who have made share purchases based on false information but for employees who, through 401ks, have invested their retirement savings in company stock.

How much will it cost to hire an attorney?

Most attorneys are hired on a contingency-fee basis, which means that the attorney recovers fees only if you recover a judgment in the case. The fees that they recover are usually a percentage of your award.

How much can I expect to recover if I go to arbitration?

Investors may be awarded out-of-pocket losses, reasonable attorney fees, interest on the losses, and punitive damages. The exact amount that you recover varies in each case.

What can I do if I think I have been defrauded?

The National Association of Securities Dealers (NASD) and various state securities divisions offer a formal complaint process to investors, with the filing of a complaint triggering an investigation of the broker. If the investigation proves that the broker has engaged in any unlawful practice, the broker will be subject to formal disciplinary action.

Disputes between investors and their brokers are generally subject to the arbitration process because most brokerage firms use an arbitration agreement when you sign up for their services. Don’t let this prevent you from contacting an attorney or thinking you can’t file a lawsuit because this is not always the case.

How do I know if I've been defrauded?

Suspicious activity on the part of a broker may include:

  • Several account statements showing transactions that you did not make
  • Unidentifiable debits or credits on monthly statements
  • Losing money when the market is up
  • Loss of money in the majority of investments recommended by your broker

If you believe you have been defrauded, contact Epperly & Follis, P.C. today.

What are the duties of a broker?

Brokers provide financial background of a company, the rate of commission, and other important facts that a client should know before they buy or sell stock.

How does a securities broker get paid?

The broker will earn his income based on a commission.

What is insider trading?

If a person buys or sells stock in a publicly traded company based on non-public information that they have about that company, it is considered “insider trading” and is illegal.

What is Securities Law?

Securities Law involves the rules and regulations that regulate the issuance and the sales of securities. The Securities Act of 1933 and the Securities Exchange Act of 1934 are major aspects of this type of law. Securities Fraud occurs when an individual or entity attempt to illegally manipulate the investment market. Securities fraud may be committed by brokers, financial advisers, corporations, and private investors.

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