Six Red Flags That You’re Being Targeted for Securities Fraud

Maryland securities fraud lawyer

You’ve worked hard all your life, and did your best to save up a little nest egg to retire on. However, a less-than-scrupulous person comes along and thinks they’d like to have your nest egg. They might try to pull the ol’ One-two on you to make your hard-earned money theirs, and then disappear into the night. This is called securities fraud, my friend.


By definition, securities fraud is a deceptive practice that convinces people to make an investment on false information, which results in a significant loss in money. We’ve put together a quick guide to make sure you avoid being a victim of securities fraud:


Six Red Flags That You’re Being Targeted for Securities Fraud

  1. If something sounds too good to be true, it probably is.

    One hook that scam artists use to commit securities fraud is to create investment opportunities that you just can’t refuse. However, there is no such thing as a “Get rich quick” scheme. If the business proposition you are being told involves a huge return on your investment in a short period of time, you should consider it a red flag. There is a typical “going rate of returns” on an investment, if you are being offered a return much higher than what is typical, hold on to your wallet and run.
  2. If you are being pursued without asking for information.

    We all joke about those emails that you get from a prince in Nigeria that needs money and you’re going to get so rich off it in return. While the Nigerian prince scam is so cliche most people won’t fall for it, you should use it as a cautionary tale to avoid other securities fraud scandals. If you are receiving unsolicited emails, calls, and even being visited in person with investment opportunities you never asked for, you are probably being targeted for fraud. Don’t give them any of your information, and please don’t give them your money.
  3. You’re hearing guarantees that there is no risk.
    When an investment opportunity comes with a promise that your investment is low risk or no risk, you should shut the deal down. If you talk to any securities fraud lawyer or business attorney, the first thing they’ll tell you is that by definition, an investment comes with some degree of uncertainly. If you’re being told that your particular investment is that one exception to the rule and involves no risk, you are dealing with an untrustworthy person. Do not give them your money, unless you want to spend more money hiring a stockbroker fraud lawyer afterwards.
  4. Your investment involves the wolf guarding the chicken coop scenario.

    If your investment is on the up and up, the money is held by an independent investment agency who is regulated by the Fed. If your investment involves giving money straight to the manager of the invested capital, you should be very wary. When that money disappears, the person you’ve invested in is going to disappear as well.
  5. You’re feeling bullied into making an investment.

    Any securities fraud attorney will tell you that you should always think through an investment before you hand over your cash. However, the less than honorable investment sales people don’t want you to do this. If you think through you’re investment, you’re inevitably going to see all of the holes in their disguise. Instead they’ll say things like if you don’t invest right this second, you’ll lose the opportunity forever, They might try to make you feel dumb or intimidate you into making the investment right now, rather than thinking it through. If you are feeling pressured to make an investment immediately, you should run — not walk — to the exits.

  6. Your investment will get mixed in the murky waters of an investment pool.

    When you make a legitimate investment, you have a direct account with your name on it that you are in ownership of. If you decide to sell your stocks later, that account can be transferred to someone else. When you get mixed into an investment pool, you have no control over the ship. You don’t even really know what is yours after a while. Con artists use this cloud of confusion to their advantage. Don’t be fooled into investing into a pool that you don’t have ownership of.

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