When you hire a financial advisor to manage your securities portfolio, you expect them to comply with their legal obligations and put your interests first. After all, you typically hire a financial advisor because they possess specialized knowledge about securities and finances that help them maximize their clients’ profits and achieve their goals.
Unfortunately, financial advisors are routinely accused of committing securities fraud and causing their clients significant monetary losses. A Dallas securities fraud lawyer at The Hunnicutt Law Group can review the details of your case and determine whether you qualify to seek compensation for fraud. Contact our office today to schedule an appointment.
What Is Securities Fraud?
The fact that you lost money investing is not automatic proof that you were a victim of securities fraud. Securities fraud occurs when financial advisors provide investors false information or use deceptive practices during the advisory process.
Types of Securities Fraud
Securities fraud can happen in many different ways. Some common forms of securities fraud are detailed below.
Misrepresentations and Misleading Statements
Misrepresentation is a common form of securities fraud. Investors cannot make false or misleading statements about an investment to convince the investor to make a certain purchase. A financial advisor may violate this rule by making misleading statements about the likelihood of returns or about a security’s performance. Alternatively, an advisor may omit undesirable information about an investment to keep the investor from backing out.
If you relied on an intentionally false or misleading statement to make an investment, you may qualify to seek compensation for securities fraud. You generally have a limited time to bring a securities fraud claim, so you need to act fast and talk to a Dallas securities fraud attorney immediately.
Pump-and-Dump Schemes
A pump-and-dump scheme is a form of market manipulation that occurs when a group posts content on the internet enticing investors to purchase a stock as soon as possible. Although pump-and-dump schemes started through cold calling, social media provides scammers a multitude of potential victims.
In the scheme, people with thousands of social media followers promote certain stocks and encourage their followers to purchase the stocks. Once investors purchase shares of the stock, making the stock price increase, the scammers sell their shares at a profit, resulting in a dramatic dip in the share price.
You should never use unsolicited advice on social media to make investments. If you suffered losses in a pump-and-dump scam, contact an investment fraud lawyer today.
Excessive Trading
Excessive trading, also known as churning, occurs when a financial professional makes numerous trades in a customer’s account for the primary purpose of generating commissions. The SEC’s Regulation Best Interest, or Reg BI, requires brokers to act in the client’s best interest and not place their own interests ahead of those of the investor. Making excessive trades is almost never in the best interest of a client—even one with a high risk tolerance. If your investment advisor made excessive trades in your account, our securities fraud lawyers in Dallas can help.
Signs of Potential Securities Fraud
The SEC outlines warning signs that may indicate potential securities fraud. Red flags you should look for include:
- Aggressive sellers without verified credentials,
- Investments that sound too good to be true,
- Promises of guaranteed returns,
- Pressure to invest immediately,
- Unsolicited sales pitches that solicit personal information,
- Sensationalized sales pitches that contain fabricated testimonials, or
- Unapproved trades in your account.
Investors can learn whether their financial advisor is licensed online.
How Can a Dallas Securities Fraud Lawyer Help Me?
Investing is inherently risky, and sometimes losses occur with no misconduct involved. But if you believe you sustained losses due to securities fraud, contact a securities fraud lawyer to review your case.
Our team will gather information about your relationship with your financial advisor, your investment experience and objectives, your financial condition, and any representations or promises your advisor made. We will also collect your account statements, correspondence, and marketing materials from your advisor.
Many securities fraud complaints are resolved through arbitration. While arbitration is less formal than a courtroom trial, it is still a legal process with complex rules. Thus, it is critical to have an attorney in your corner to give you the best chance of recovery.
Contact Our Securities Fraud Lawyers in Dallas at The Hunnicutt Law Group
Our team at The Hunnicutt Law Group strives to provide our clients with the highest level of legal representation and professional attention. We offer our clients a realistic picture of their case from the outset and guide them through the legal process. Steve Hunnicutt has more than three decades of legal experience and looks forward to putting this knowledge to work for you. Call us today to learn more.
J. Stephen Hunnicutt
Our founding attorney, Stephen Hunnicutt, set the precedent for a commitment to excellence and a focus on the client. With 25 years of experience, he has handled countless cases involving business litigation and commercial litigation. Over the years, Mr. Hunnicutt has worked as in-house counsel for a Fortune 500 energy company, a large firm, a small firm, and finally, in his own practice.
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