Protect Your Investments: Warning Signs of Securities Fraud

Protect Your Investments_ Warning Signs Of Securities Fraud


Investing your money can be an effective way to plan for retirement or to begin saving to send your children to college, but securities fraud (investment fraud) is an increasingly problematic presence within the stock market, making it hard to know what to do. Keep these warning signs of securities fraud in mind to protect your current and future investments:


Your investment broker serves as your connection to the world of investing. If you can’t seem to get your broker on the phone, and he or she simply doesn’t return your calls, there may be something going on behind the scenes that you don’t know about. Transparency is a large and important part of investing, and your broker shouldn’t be impossible to get ahold of. Your broker could also be dishonest with you by failing to disclose important information regarding your investments.

Account Statements

In the same way that it’s a good idea to pay attention to the individual charges on your credit card statements to guard against fraud, it’s important to pay attention to the transactions on your investment account statements. If the transactions on your statement are particularly confusing, or if you notice transactions that you didn’t authorize, some form of securities fraud might be taking place.


Your own expectations and those of the public both play roles in warning you that investment fraud is occurring. You should never expect for investment opportunities to be risk-free or guaranteed. The nature of this complex system means there will always be risks involved. If you’re presented with a no-risk investment strategy, realize that it’s probably too good to be true. Another red flag that could indicate securities fraud is if the publicly-expected financial results of a situation are drastically different from your own results.

Illegal Activities

There are a number of investment practices that are illegal. If your broker claims to have any sort of “special” connections or information not available to the public, he or she could be participating in illegal insider trading. You should avoid investment opportunities that encourage you to falsify any information on an account application or that sells schemes to hide money from the government.

Facing a securities fraud charge is stressful and can be very overwhelming. If you’ve been charged with a securities fraud or any other white collar crime in the Newark area, contact the Law Offices of Robert J. DeGroot. We offer free consultations, so there’s no risk in discussing your case with our team of experienced professionals.