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Hantzes & Associates | Employment & Business Law
  • Home
  • About
    • Nicholas Hantzes
  • Our Practice
    • Employment Law for Employees
    • Employment Law for Employers
    • Business Law
    • Commercial and Residential Real Estate Law
    • Outside General Counsel
  • Blog
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703-378-5000
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  5. What are the signs of securities fraud?

What are the signs of securities fraud?

On Behalf of Hantzes & Associates | Jun 7, 2023 | Business Litigation

If you are interested in investing, you could be a target for securities fraud. It is a term used for various illegal schemes crafted to manipulate financial markets and deceive investors, including foreign currency fraud, broker embezzlement and investment fraud.

Unfortunately, your interest in investing could attract scammers who are after your money while promising significant returns. It is best to avoid their shady schemes to protect yourself and your assets. These firms typically use similar tactics to lure investors. Stay away from investment opportunities that show the following signs:

  • Guarantees high return rates without providing information about the investment firm or individual’s identity and history.
  • Pressures potential investors using limited-time offers and other sales techniques.
  • Ensures that there are no risks involved.
  • Uses trust or personal connections to convince you to invest.
  • Expresses urgency by giving discounts, offers and other rewards.
  • Claims that they trade in the interbank market.
  • Keeps on pestering you even if you have already refused.
  • Makes unverified professional claims to boost their credibility.

However, these red flags are not sure signs of fraud. They are questionable practices you can look out for to avoid becoming a victim of scammers.

Practice due diligence before investing

Sometimes, an investment opportunity might seem too good to pass up. In this case, you could do your due diligence before pursuing it. As a potential investor, you could ask for written information and check with federal or state agencies to verify the investment firm’s legitimacy.

Doing so could help you figure out who to trust and avoid losses due to fraud. You could file a report at the Commodity Futures Trading Commission’s Division of Enforcement if the information does not line up.

Sadly, you cannot remove the risks of falling prey to securities fraud and other illegal activities. However, you could protect yourself by watching for the signs and reporting them if they seem suspicious.

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