An individual or organization is taking a risk by investing their assets in securities. Although most brokers do not defraud their clients, there are several different types of securities fraud that can be committed in Pennsylvania. A client can file a complaint and get a broker barred. It’s important to look out for the signs of fraud to determine if and when you need to file a report.
When a broker engages in misconduct
A broker was barred from working for the Financial Industry Regulatory Authority, or FINRA, for trading inappropriately using the names and accounts of several clients. He allegedly forged their signatures on documents and used the account of a deceased client.
Furthermore, due to his refusal to cooperate with the FINRA investigation, he became officially barred from the investment industry. The purpose of FINRA is to protect U.S. investors from working with unscrupulous brokers.
Detecting securities fraud
Making a too-risky investment, using false information, stealing a client’s identity and other actions are forms of securities fraud. It is the misuse and misrepresentation of your investment by a trusted advisor. There are certain signs that you are facing investment fraud, such as an inaccurate financial statement or an account with unauthorized activity.
Committing securities fraud is a felony that may include millions of dollars in fines, several years of probation, and up to 20 years in prison. In addition, the person found guilty must relinquish any profits or property that were earned.
Protecting investors now and in the future
As more individuals and companies make investments, brokers may have more opportunities to commit fraud. The FINRA monitors the behaviors of brokers to protect investors from various schemes. Investors who have noticed suspicious transactions may want to do research to find out if they are being defrauded.