SOURCE: Debra Speyer Law Offices
PHILADELPHIA, PA--(Marketwired - Dec 17, 2013) - It's that time of year again -- when investors take stock of their investments and review their year-end performance. It's also when Philadelphia securities and Elder Law attorney Debra G. Speyer of Speyer Law firm warns of the red flags to watch for.
Speyer should know. Formerly with the enforcement division of Financial Industry Regulatory Authority (FINRA), she focuses on investment safety and recovery of funds in the event someone has been defrauded.
While most financial advisors are trustworthy, there are some whose conduct has prompted the Securities and Exchange Commission (SEC) and FINRA to alert investors.
Con artists ultimately are caught and confess. Below is an amalgam of their statements to authorities and the promises they made:
Con man 1: Above average returns - "I promised 8% returns every year, and people couldn't throw enough money at me. I rode the wave for years -- until I got caught."
Speyer adds, "If you are offered high investment returns with little or no risk, there is something wrong. Don't open an account with that person."
Con man 2: Unregistered investments - "I sold securities that weren't registered with the SEC or anyone else. They were stocks in small bogus companies."
Speyer warns, registered companies are listed on one of the exchanges. All it takes is looking it up online or in a newspaper. If you don't see it, call the SEC immediately.
Con woman 3: No monthly statements - "I used every tactic in the book to stall sending statements. I said, 'We're changing computer systems. We're fixing a glitch. We're waiting for data from overseas.' I stalled for the better part of a year and then someone called the SEC."
Speyer says any delay to your requests is a major red flag.
Con man 4: Difficulty getting money back - "Since I devised a 'fool-proof' Ponzi scheme, I had to dodge requests for cash from investors. I avoided requests for return of funds, or, at the most, we would send a fraction of what they requested."
"When you get to this point, there is little hope of getting all your money back," says Speyer.
The SEC and FINRA provide useful information on their website to protect investors from unscrupulous stockbrokers.
Speyer encourages people to look for the following possible wrongdoings on their statement.
- Did the broker follow your investment objectives?
- Do you see investments you did not authorize?
- Do you notice frequent purchases and sales every month even though you are a conservative investor?
- Did your broker purchase investments on margin without your permission?
- Did your broker neglect to adequately explain an investment he was buying for you?
Many common aspects of fraudulent activity are random returns, too few negative returns and too many investments showing the same return every month. Speyer advocates for increased regulatory oversight. "This will help identify schemes before they occur."
If you have any of the above problems with your account, call Speyer Law to find out if you have a case at 1-800-510-STOCK or 1-800-510-7862. Or visit www.speyerlaw.com.