What to Do If You're a Victim of Investment Fraud

The promise of low risk-investment with a high return is an attractive offer to many.
Sadly, in most cases, these offers are nothing but an investment fraud designed to trick you out of thousands of dollars.
If you have been a victim of an investment fraud and don’t know what help is available to you, this article is for you.
Read on to find out what you can do and what resources are available.

What is Investment Fraud?

Investment fraud deals with a planned scheme or deception to rob investors of their money with the promise of a return.
This type of fraud includes:

  • Bank investment schemes
  • Illegal insider trading
  • Fraudulent dealings in the stock market

Illegal insider trading refers to the violation of an investment company’s confidentiality. Usually this occurs when an individual shares or sells private information to an outsider.
Fraudulent manipulation of the stock market can take many forms. Manipulation of the stock market includes either a spammer or telemarketer using persuasive techniques to promise potential investors a high return on their investment.
Also, it can refer to someone buying or selling shares of the same company via different investors.
This happens when a legitimate financial institution claims to be affiliated with organizations such as the International Chamber of Commerce or International Monetary Fund only to deceive investors.

What Are the Signs of Fraud?

No one wants to be placed in a situation where their hard earned money is lost in a fraudulent investment. If you ever suspect you might be a victim of fraud, chances are you’re right.
However, you should know the signs before you begin speculating whether you’re a victim of fraud.

They Promise A Big Return With Little Money

A big red flag is when investors offer you big returns on a small investment. This is always a sign of potential fraud.
The investment logic is simple — high-risk investments offer high returns and low-risk investments offer low returns.
With investments, there’s always a risk involved, so when you’re promised a no risk return, you should question it.

You Feel Pressured to Make a Move

Making an investment is a big decision which should not be taken lightly. A legitimate trader will never pressure you to do so. On the contrary, they will present all the information to you, and wait for you to make an educated decision.
On the other hand, a scammer will often pressure you to make a decision on the spot. After all, they need to move fast and get more victims.
If you ever feel you got pressured into making an investment, you look into it right away.

The Person is Not Registered

Did you forget to check whether or not the agent had the proper registrations and licenses to trade investments?
If you investigate and the person is not registered, chances are they’re trading illegally.

They Offer to Share Insider Secrets

When a trader offers you insider information or special tips, take this as a warning. Legally, they’re not authorized to share their organization’s information with the public.

What Can You Do If You’re a Victim?

If the unthinkable happens and you become a victim of investment fraud, you need to know what to do next in order to take action.

Collect all the Information

The first thing you should do is collect all the information you consider relevant to the case.
In the file, place all of the trader’s contact information you have such as name, email, mailing address, website, phone number, and any other information you consider relevant.
Collect financial statements and write a detailed timeline of how the events happened.

Make Sure You Know Your Rights

It’s important to know that you’re not alone and you have rights. The federal government and in most cases state government (check your state for laws) offer rights and protection to victims of fraud.
Check with the Department of Justice for a list of your rights and resources.

Contact A Regulatory Agency

There are regulators who specialize in dealing with investment fraud cases:

  • U.S. Securities and Exchange Commission
  • North American Securities Administration Association
  • National Association of Insurance Commissioners
  • National Futures Association

Report to Law Enforcement

Aside from reporting to financial regulatory agencies, you should also report to your local law enforcement.
You could contact your police department and file a police report. Get in touch with your district attorney’s office or attorney general’s office to report the fraud.

Know Your Other Options

Once your money is tied up in fraud, it might be difficult to get it back. However, it’s not impossible. In some cases, it’s possible to recover your money through mediation, arbitration, or even a civil lawsuit.
Don’t hesitate to seek legal representation to help you recover your investment money.

Always Follow Up

After you take all of the necessary steps to report the fraud, don’t forget to follow up. It might take the law enforcement agencies some time to process your claim. but you should always follow up after 30 days.

How to Prevent Investment Fraud?

Thinking about potential investment scams might make you skeptical from ever investing, but not everyone is a scammer.

Research is the Key

If you’re getting unsolicited investment requests, make sure you thoroughly do a check on the company. In the digital world, it shouldn’t be difficult to get a full background on a legitimate company.

Ask the Right Questions

Don’t go into an investment transaction blind. Ask the right questions even if they might seem obvious or unnecessary.

Question Unsolicited Investment Opportunities

If you get an offer, question it. Ask the person contacting you, how they got your information and why. If it seems out of the blue chances is you’re dealing with spam, so you need to ignore it.

Get to Know the Person

Perform a profile check on the person contacting you. Check for their credentials on LinkedIn or ask for their license number.

Are You a Victim of Investment Fraud?

No one wants to ever find themselves a victim of fraud. However, when it happens, it’s essential to know the steps you should take to remedy it.
If you discover you’re a victim of fraud, you’re within your legal rights to take action.
At Savage Villoch Law, we’re dedicated to helping people who are victims of investment scams recover their money. Don’t hesitate to contact us for a consultation.

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