Real estate investment fraud damages

Along with a successful real estate market often comes mortgage fraud and other real estate investment schemes. This field is for validation purposes and should be left unchanged. Elder Consumer Rights.

Real Estate Fraud Lawyer: What to Know and How to Defend Yourself if Charged

When you trust an investment firm to maintain and hopefully grow your savings, you expect to receive professional and accurate information tailored to your particular circumstances. Sometimes unscrupulous stockbrokers and investment advisors take advantage of your trust, and you can find yourself facing the loss of your life savings. Whether your loss is due to unsuitable investment advice, conflicts of interest, or investment fraud, all you know is your retirement income is gone. Our securities and investment fraud lawyers are dedicated to helping victims recover financial losses caused by stockbroker fraud, broker misconduct, and unsuitable recommendations. Investment fraud and broker misconduct can take many forms. At no charge, we are available to analyze your portfolio to determine if misconduct caused you to suffer losses. Below are a sample of the dmaages of securities and investment issues we analyze and litigate every real estate investment fraud damages.

Disclaimer

Real estate and mortgage fraud have become hot-button legal issues after the foreclosure and financial crisis of Because public officials and politicians blamed the economic collapse on shady mortgage dealings, there has been tremendous pressure to fight mortgage and real estate fraud and to aggressively prosecute those suspected of committing these offenses. Defendants accused of mortgage or real estate fraud could find themselves facing the threat of decades in federal prison because U. You need to defend your rights and do everything you can to protect your freedom. A New York City real estate fraud lawyer can help you to understand the charges you face and explore the options available to you for defending yourself.

Types of Investment Fraud

When you trust an investment firm to maintain and hopefully grow your savings, you expect to receive professional and accurate information tailored to your particular circumstances. Sometimes unscrupulous stockbrokers and investment advisors take advantage of your trust, and you can find yourself facing the loss of your life savings. Whether your loss is due to unsuitable investment advice, conflicts of interest, or investment fraud, all you know is your retirement income is gone.

Our securities and investment fraud lawyers are dedicated to helping victims recover financial losses caused by stockbroker fraud, broker misconduct, and unsuitable recommendations. Investment fraud and broker misconduct can take many forms. At no charge, we are available to analyze your portfolio to determine if misconduct caused you to suffer losses. Below are a sample of the type of securities and investment issues we analyze and litigate every day.

Bonds are debts sold by companies or government entities to investors to raise capital. They are offered by financial advisors and brokers as safe investments. But bond fraud can cost innocent investors substantial portions of their portfolios and retirement savings, and it is a problem that tends to increase amid recessions.

Fixed income investments are supposed to be the cornerstone or foundation of a well-diversified portfolio. Your fixed income holdings are not supposed to be where an investor takes significant risk. There are different forms of bonds within these categories, and bonds may be purchased individually or through bond funds, in which investors buy into pools of bonds in a manner similar to mutual funds.

High yield junk bonds have significantly more risk than investment grade bonds. In addition, junk bonds typically move up and down with stocks and provide little or no downside protection when the stock market is declining. As with any investments, there are risks associated with bonds. Unfortunately, investors are not always made aware of the potential dangers by their financial advisors.

The risks vary dramatically with different kinds of bonds and with different credit ratings. In some circumstances, investors may buy so-called junk bonds, which are high-interest, high-risk corporate bonds. Junk bonds are often sold under the guise of bond funds or referred to as high-yield funds, and financial advisors and brokers have been fined for misrepresenting or omitting material information regarding the risks of the investment and the bonds themselves.

Different types of bonds come with varying inherent pitfalls, and your financial advisor has a responsibility to disclose all known material facts associated with a bond or bond fund offering and offer investments appropriate to your risk tolerance and other individual factors.

Some bonds that promise high return, for example, may also be issued by a company that is a credit risk and may default; other bonds carry a risk that the issuers may be able to pay investors at lower interest rates and a reduced return; some bond funds may have been exposed to sub-prime loans. Another common and particularly deceptive form of financial advisor misconduct is the concealing of charges related to the bond or bond fund.

Because the prevailing market prices of many bonds are not available to investors, financial advisors sometimes exploit consumers by engaging in the practice of markups and markdowns. The markup is the difference between the actual cost of a bond and the fee at which it is sold to the investor; the markdown is the hidden fee subtracted from the initial purchase cost.

A broker is an individual that arranges a contract between a buyer and seller in return for a commission. Brokers coordinate contracts for property that they do not possess and do not have a personal. The property can be real estate, mortgages, insurance, stocks, bonds, and commodities. The most common types of brokers are securities brokers, commodities brokers, real estate brokers, mortgage brokers, and insurance brokers.

Wall Street has spent millions of dollars marketing its brokers as financial advisors or investment consultants. Many financial advisors provide broad investment advice regarding asset allocation and diversification. This investment advice has to be suitable to meet:. Churning in stock accounts is a form of investment fraud that involves the excessive transaction of your investment account’s securities by your broker without regard for your financial objectives in order to generate commissions.

Though profitable for unethical financial professionals, churning is costly to investors and can devastate your life savings. Churning involves the regular turnover, purchases and sales of securities, in your portfolio to generate commissions. The broker-dealer is supposed to be supervising the trading activity of the financial advisor to identify actively traded accounts.

For example, brokers who churn may sell successful investments typically stocks and mutual funds for a marginal profit to create the illusion that an investment portfolio is performing well while simultaneously weighing it down with stagnant or failing securities and depleting it with unfair commissions. Profitability is not a defense to churning a portfolio.

If it were, a financial advisor could churn with impunity up to the gains of the portfolio. The Financial Industry Regulatory Authority FINRA prohibits the practice of churning and provides a securities arbitration process through which investors can seek to recover losses and illicit commissions.

A successful churning claim requires proving that your broker had control, or de-facto control of your investment account transactions and conducted transactions that were excessive in relation to your investment objectives, resources and risk tolerance and without regard for your best interests.

Churning in stock accounts can be established using various methods, including calculations that can help determine whether a broker’s transactions meet the definition of excessive. These calculations include assessing the commission-to-equity ratio and turnover rate of securities in your investment account. Investment firms have a responsibility to establish and maintain rules regarding the supervision of their registered financial advisors and brokers.

The supervision includes regular reviews of your portfolio to ensure it meets your investment objectives and risk tolerance. Broker-dealers are required to contact you in response to red flags to ensure you understand the risks involved with your holdings or trading strategy.

If your investments lost money due to a representative’s negligent or fraudulent behavior and the firm’s failure to supervise played a role, our lawyers may be able to help you recover your losses. Investment firms have a legal obligation to ensure that their agents adhere to various federal guidelines and securities industry regulations.

Securities and Exchange Commission SECrequires member investment firms to implement supervisory systems for registered representatives and their financial offerings. Because many large investment agencies operate satellite branches that may lack adequate supervision and because smaller investment firms may be acquired by and absorbed into larger ones with minimal oversight in the transition, there is often opportunity for a financial advisor’s negligent or fraudulent behavior to adversely impact investors.

There are a number of circumstances in which investor losses may be the result of an investment firm’s negligence in the supervision of its authorized financial advisors, brokers and other investment professionals.

These factors often relate to the duty of investment firms to provide adequate oversight regarding their agents’ daily job functions and include:. Ignorance of an investment professional’s negligent or fraudulent behavior does not excuse investment firms from accountability. With the help of a knowledgeable lawyer, investors can pursue the recovery of their losses. Many investors fall prey to the unethical practices of brokers who put their own interests above those of their clients.

Common fraudulent investment products and scams include:. Margin trading is a practice in which a financial advisor recommends an investor purchase stocks by borrowing money from a broker-dealer using securities that are already owned as collateral. Brokers sometimes recommend margin accounts as a way to generate commissions without an additional up-front investment from their customers, despite the fact that margin trading is a high-risk strategy that is not in the best interests of many investors.

Financial advisors and brokers have an obligation to make investment recommendations that are consistent with an investor’s financial objectives, risk tolerance, income level and other factors. When recommending margin accounts, financial advisors must make investors aware of the associated risks and receive written client consent prior to establishing margin accounts and engaging in margin trading.

Investors should receive a margin disclosure statement that defines the terms of the margin account, including the interest charges linked to borrowing money for the margin account. If your financial advisor or broker recommended a margin account that was inappropriate for your established circumstances and investment goals, or improperly used the margin account as a line of credit or to purchase unstable securities, he or real estate investment fraud damages may have committed a breach of fiduciary duty and you may be able to pursue losses incurred as a result.

Margin accounts may be sold to investors as a means of increasing their buying power to own more stock without full, immediate payment. Margin accounts are especially high risk for average investors seeking to build portfolios for retirement. Investors may suffer significant losses even in legitimate, consensual margin trading, although customers who agree to margin accounts are often not made fully aware of the risks. If the equity level of a margin account falls below the investment firm’s maintenance margin requirements the amount an investor’s account must maintain after margin trades the broker can sell securities without contacting or obtaining permission from the investor to cover the difference.

Brokers may also charge commissions on the sale of these securities to compensate for the deficit, further depleting investors’ resources. Some financial advisors and brokers also make improper use of margin accounts to purchase speculative or volatile stocks, or tread margin accounts as lines of credit. Because of the complexities of margin accounts and the regulations that bind them, securities arbitration claims related to margin trading can be challenging for investors without the help of an attorney with extensive experience in cases related to investment malpractice.

The fundamental principle of both federal and state securities laws is complete disclosure of material risks and conflicts of interests.

Many investors rely on information and recommendations from their financial advisors or brokers before approving securities transactions. The misrepresentation or omission of material information regarding an investment that results in losses may be considered a breach of fiduciary duty, and victims of this form of investment fraud may be able to recover their losses.

Financial advisors and brokers have an obligation to fairly disclose all known material facts related to an investment. Material facts encompass information a reasonable person would consider important in deciding whether to sell or purchase a security.

Material facts include but are not limited to the disclosure of all fees linked to the investment, as well as known risks associated with the security being recommended or sold. Inaccurate or incomplete information can put investors at risk, and financial advisors and broker-dealers who misrepresent or omit material facts about an investment may be held accountable for resulting losses.

The misrepresentation or omission of investment information by a financial advisor or broker may be an intentional act of fraud or due to negligence. Some unscrupulous advisors and brokers may provide investors with unrealistic expectations for investments or base their recommendation of a security or strategy on an inaccurate risk assessment; others may not perform adequate diligence in researching and disclosing available material facts.

Securities and Exchange Commission SEC and state securities laws, losses attributed to a financial advisor’s or broker’s misrepresentation or omission of material facts may result in a securities arbitration claim for damages. In order to recover compensation for losses stemming from the misrepresentation or omission of material facts about an investment, an investor must establish details including:. One of the fundamental principles of investing is the diversification of funds across different asset classes and market sectors to minimize the risk for losses without sacrificing returns.

Often, concentrated portfolios are not easy to identify because the portfolio may have several mutual funds or dozens of holdings. Registered brokers and financial advisors have an obligation to know certain essential facts about individual investors in order to make appropriate recommendations and provide investors with the information they need to make informed decisions.

These details include an investor’s age, investment risk tolerance and financial status. FINRA requires the broker-dealer to perform what is known as a customer-specific suitability analysis before any recommendations are. All recommendations and investment advice, including trading strategies, must be in an investor’s best interest and suitable for their investment objectives.

If a financial professional or broker-dealer is fraudulent or negligent in recommending or allocating an overconcentration of assets that is inappropriate for your investment goals, income level, financial obligations and other individual factors, they may be held accountable for any losses you incurred. Although each investor is unique, financial advisors and brokers have an obligation to recommend a well-diversified portfolio.

Asset allocation, diversification through stocks, bonds, and cash, can reduce risk without sacrificing returns. Each asset class behaves differently. For examples, stocks typically move up when bonds are.

This is known as inverse correlation. Surprising to many investors is the fact that stock selection and market timing account for very little of a portfolio’s performance. The reason is because no one knows when the market or specific stocks are going to go up or.

This is commonly known as the random walk. The costs associated with getting in and out of positions when trying to time the market eat up whatever benefit was gained from the trades.

Of course, the broker-dealer and your financial advisor make money on every security traded. A balanced investment portfolio consists of a diversification of securities throughout different asset types such as stocks, bonds and cash, as well as multiple industry sectors such as technology, medical and energy in accordance with your individual circumstances and financial goals.

Like asset classes, the industry sectors do not move up and down in tandem.

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This occurred during a housing recession. The general principle that an integration or exculpatory clause does not protect a party against his or her own fraud applies equally to a seller who has an affirmative duty to disclose known material facts to the buyer. One appraiser measured the gross living area at 4, square feet, and the other at 4, square feet. The Federal Trade Commission. Common scams include negotiating real estate investment fraud damages appraisals, falsifying identities to obtain loan approvals and forging credit reports. Unwanted Telemarketing. However, these cases of alleged intentional wrongdoing are the exception rather than the norm. Recognizing Signs of Identity Theft. Alexander H. To succeed on a civil fraud actionthe following four criteria must be met:. Deceptive Health Care Practices. A principal [i. Find a Consumer Law Lawyer. To minimize liability, everyone on the selling side should disclose, investigate, and continue to disclose before and during escrow. Consumer Protection. Small Claims Court for Consumers.