Investment Fraud

Schwartz: Your Investment Fraud Attorneys in Tampa, FL

Have you been taken advantage of by an investment advisor, stockbroker, or financial advisor? Are you asking yourself, “how could this happen?”

When investing in the stock market, it’s common to trust advice from your financial professionals. However, sometimes these professionals abuse the relationship they’ve created with their clients. A financial loss for the client isn’t the only result of this abuse. Instead, there are serious legal repercussions that arise when a financial advisor makes a decision in order to personally profit from your account.

Our Tampa investment fraud attorneys aggressively pursue claims on behalf of clients who have been damaged as the result of negligence, fraud, and misconduct by their financial advisors and brokerage firms.

Our Work

Most financial advisors are considered “fiduciaries.” This individual must be completely honest with clients, and they need to use impeccable judgment when making financial decisions on their behalf. Doing otherwise is not only unethical – it can be criminal and you may have civil claims against the financial advisor. Investment fraud (also known as stock or securities fraud) involves the illegal or falsely claimed sale of financial instruments like stocks, bonds, notes, commodities, currency, or other financial assets.

Typical investment fraud schemes involve offers of low or no-risk investments, guaranteed returns, overly-consistent returns, complex strategies, or unregistered securities. Have you been the victim of one of these crimes?

What Kind of Investment Fraud Happens in Tampa?

Tampa is no different from other metropolitan areas. While most fiduciaries have your best interest in mind, there are some “advisors” among them who callously violate their fiduciary responsibilities for personal gain.

Unfortunately, there are many ways a financial advisor can conduct business illegitimately. Fraudulent investor claims usually involve the following practices:

  • Financial advisor negligence: When a financial advisor behaves in a manner that falls below a standard of care established to protect investors. An example of this cause of action would be a financial advisor who makes investment recommendations outside of the investor’s stated risk tolerance or investment objective, or if they breach a duty to the client that causes the client harm.
  • Breach of fiduciary duty: If the financial advisor is a fiduciary and he/she puts his/her interests before the client’s interest, the financial advisor may have breached his/her fiduciary to the client.
  • Misrepresentations and omissions: Financial advisors are obligated to provide their clients with all of the material facts related to a specific investment. If these material facts are not provided, or if they are ignored, you may have a cause of action. Misrepresentations and omissions can be either intentional or negligent.
  • Unsuitable investments: FINRA’s suitability rule states that the financial advisor “must have a reasonable basis to believe” that a transaction or investment strategy involving securities they recommend is suitable for the customer. If your financial advisor recommends securities, products, or strategies that are unsuitable for you, you likely have a viable cause of action against the advisor.
  • Churning or excessive stock trading: Reverse churning occurs when a financial advisor places a client’s money into a fee-based advisory account to rake in management fees and then performs little or no actual management from that point forward.

What Kind of Proof Do I Need to File an Investment Fraud Case?

Substantiating an investment fraud claim means showing that you lost money due to reliance on your broker or other securities industry professionals’ supposedly factual information. That individual either knew or should have known that information was untrue.

With some fraud claims, an investor must show reliance on one or more actions related to a misrepresentation. When showing reliance is required, it can be established by direct or indirect evidence.

Direct Evidence

Direct evidence might be a statement in a prospectus claiming the existence of a lucrative contract. But the issuer did not actually have that document. If an investor proves that this statement encouraged them to invest, they have given direct evidence of reliance.

Indirect Evidence

There are also cases where indirect evidence is acceptable. Below are two examples:

1. Fraud-on-the-Market Theory

Suppose a financial advisor misrepresents a security traded on the open market with the intent to affect that security’s price. In that case, their client doesn’t need to provide proof of harm. This action presumably would compel someone to buy that security, and, thus, they would suffer a loss.

2. Fraud by Omission

If an investor claims harm due to information left out in consultations with their advisor, it is considered fraud by omission. The courts have determined that if omitted information could reasonably be expected to influence an investor’s purchase decision, proof of reliance is unnecessary; it is presumed to exist.

Tell Us About Your Case

At Schwartz, we dedicate ourselves to clients’ needs. Whether in state or federal court, our experienced investment fraud attorneys can help you recover your losses. We take cases on a contingency fee basis, which means we do not collect a fee unless we recover for you.

If you have an investment fraud claim, contact us today.