Securities Fraud Class Action Lawsuit

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A securities fraud class action lawsuit might be filed when investors are taken advantage of by an individual or firm responsible for managing investments behaves in a dishonest or unethical manner.

There are several different types of securities fraud. Most cases of securities fraud include a misrepresentation of investment information. Often, it involves reassurances regarding an investment that are unwarranted and cause an investor to take an unjustifiable risk. Both individuals and organizations can commit securities fraud.

The FBI lists several different types of securities fraud, including:

  • High yield investment
  • Ponzi or pyramid schemes
  • Advanced fees
  • Foreign currency fraud
  • Embezzlement by the broker or firm
  • Hedge fund related fraud
  • Late day trading
  • Unauthorized training
  • Churning
  • Improper asset allocation
  • Misrepresentation or omissions

Securities fraud cases typically include providing false information or withholding information, providing bad investment advice, or acting on outside information, all of which are illegal.

Recognizing Securities Fraud

In some instances, it’s easy to recognize securities fraud because it’s as simple as spotting an offer that’s “too good to be true” There might also be a high-pressure sales pitch, unsolicited offer, or demand for personal information.

If you feel you are being rushed to act or that an offer is only good for a limited time, chances are it might be a scheme.

There are also times when it’s not as easy to spot securities fraud. This often occurs when an individual or small group at an otherwise legitimate investment firm gets wrapped up in illegal activity. Investors assume because the firm is credible that everyone on the team is trustworthy, but this isn’t always the case.

What’s the Penalty for Securities Fraud?

The government takes securities fraud very seriously and the penalties can be steep. There might be both civil and criminal penalties, and it’s possible to spend time in prison for the crime.

Should I Hire a Securities Fraud Lawyer?

If you’ve been the victim of securities fraud you might want to contact a securities fraud lawyer.

This includes being defrauded, swindled, or cheated by a brokerage firm or stockbroker. It can be difficult to admit you’ve been a victim of fraud, especially if you’ve considered yourself a savvy investor thus far.

Unfortunately, fraudsters prey on all types of investors. They know how tempting an offer to invest in a “sure thing” can be and they work hard to separate you from your money.

If you’ve been scammed and you believe the stockbroker or firm with whom you were working committed a crime, it’s important to report the incident.

Hiring a securities fraud lawyer might give you the opportunity to consult with someone who understands the industry and is able to identify a scam. Any attempts to resolve the problem on your own might hurt your case. Communication with the firm or broker can damage the outcome of your case.

A consultation with a legal expert allows you to discuss your situation and determine the next best step for resolving your case. An experienced securities fraud lawyer might make it easier to resolve the situation.

Securities Fraud Attorneys Can Help You Recognize a Problem and Protect Yourself

The best defense against securities fraud is to avoid being scammed in the first place. Before working with an investment firm, be prepared and educate yourself. The more information you have the easier it will be to spot red flags. Due diligence can save you a great deal of frustration and money, so make sure you investigate a firm before moving forward and review the financial statements from any brokerage firms before handing over your money.

Of course, even the most diligent of investors can fall prey to fraudsters. Many individual scammers align themselves with reputable companies, biding their time until they can separate investors from their money.

If you are working with a legitimate firm with a credible reputation, it’s still important to conduct research into your individual broker. Determine whether the person with whom you are working is properly credentialed and take time to analyze any recommendations you’re given. You should never rely solely on the advice of your broker when making an investment decision.

Even with proper research and due diligence, it’s still possible to be a victim of securities fraud.

If you believe you’ve been scammed or you’re being targeted in a securities fraud scam, contact us to discuss your situation.


Since its establishment in 1999, Seeger Weiss has led some of the most complex and high-profile litigations in the U.S.