Ponzi Schemes are fraudulent investment scams that pay returns to investors from their own money or money paid by subsequent investors rather than from any actual profit earned. Their name comes from Charles Ponzi, who duped thousands of people into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period. Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons. Now the term "Ponzi Scheme" applies to investment scheme that "rob-Peter-to-pay-Paul", money from new investors is used to pay off earlier investors until the whole scheme collapses.
If you have lost your life savings or a large amount of money through a fraudulent investment scam which you were encouraged to invest in by an investment broker, feel free to submit an inquiry or send an e-mail to Texas Ponzi Scheme, Broker Fraud, and Investment Broker Negligence Lawyer Jason Coomer. He may be able to help you recover your losses or at least obtain an accounting of the investments. He handles broker fraud and broker negligence claims including careless investment advice, deceptive investment advice, inadequate risk warnings, churning, conflicts of interest, and other unethical broker wrongful acts.
Stock Brokers Hold a Monopoly on Stock Investments
It is an all too common scenario, a person hires an investment firm or broker and follows their investment broker's recommendations, trusting this broker's expertise with their life savings or a substantial amount of money. Unfortunately, the stocks that the broker selected plummet, the brokerage firm's CEO is all over the news defending his company against allegations of securities fraud, and the life savings of numerous investors are lost. Unfortunately, tens of thousands of investors have been a victim of broker and financial planner fraud and negligence.
News Stories on Alleged Investment Fraud and Negligence
"Andrew Cuomo, the New York Attorney General, today charged the managing partner of Gabriel Capital Group and former GMAC Financial Services chairman with civil fraud. Mr Cuomo alleged that Mr Merkin: "profited enormously from Madoff's scheme, reaping huge commissions while investors lost all their money."
The complaint, filed in New York State Supreme Court, said investors, including several prominent charities and non-profit organisations, entrusted their investments to Merkin. The hedge fund manager then steered client money to Madoff without their permission, in exchange for $470 million in fees, Mr Cuomo contends.
Mr Merkin's three funds are Ascot Partners LP with Ascot Fund Ltd, Gabriel Capital Corp and Ariel Fund Ltd." "Top Money Manager Ezra Merkin Charged with Civil Fraud in Madoff Case Andrew Cuomo, the New York Attorney General, Today Charged the Former Chairman of GMAC Financial Services of Civil Fraud", Times Online
"KPMG, PricewaterhouseCoopers, BDO Seidman and McGladrey & Pullen all gave clean bills of health to the numerous funds that invested with Bernard Madoff and his asset-management firm. Clients say the large accounting firms signed off on statements that said the Madoff investment vehicles had billions of dollars in assets as well as an unlikely track record showing years of always-positive returns. The billions have vanished, and the impressive returns now look to have been made up." "The Madoff Fraud: How Culpable Were the Auditors?" Time By Stephen Gandel, Wednesday, Dec. 17, 2008.
"A federal appeals court Tuesday denied a claim from investors unable to get their money from accounts connected to companies owned by troubled Texas billionaire R. Allen Stanford."... "About 4,000 accounts containing about $1.7 billion remain locked under the authority of a Texas receiver appointed by a federal judge in Dallas." "Federal regulators have accused Stanford of running an $8 billion investment fraud. He has denied the allegations. ...The receiver, Texas attorney Ralph Janvey, has already approved the release of about 28,000 accounts. The remaining 4,000 accounts remain locked because Janvey said they include money related to certificates of deposit at the Stanford International Bank in Antigua that are central to the government's fraud case against Stanford and his companies." "Court denies appeal to unlock Stanford accounts" 2009 The Associated Press April 7, 2009, 5:43PM
Fraudulent Broker Claims
Recent decisions by the Securities and Exchange Commission (SEC) imposed over $1.4 billion in penalties on several top investment banks, brokerage firms, and brokers. As such, it is apparent that you cannot always trust brokers to give you the complete picture regarding stocks, bonds, and other securities. If you feel that your investment dealer or adviser has not been honest and has caused you to suffer significant investment losses, your best bet to recover your losses from investment fraud or securities fraud losses is to speak to an experienced broker fraud lawyer regarding your stock fraud concerns.
In reviewing stock broker fraud, an investor should know that investing in the stock market can be a risky proposition. Markets and investments can fluctuate and the majority of investment losses result from such fluctuations rather than from stock broker fraud or misconduct. However, stock fraud does happen, and you should understand common forms of stock broker misconduct. Some of the most common forms of broker fraud are as follows:
Purchase of Unsuitable Securities
Investing in Variable Annuities/Variable Universal Life Policies
Risky or negligent Retirement Planning
Failure to Advise of Risky Investments
Unauthorized Risk Profile Changes
Stock brokers are paid commissions for the transactions they generate, which can encourage some stock brokers to trade excessively or churn stocks for the purpose of generating commissions instead of working for their client's investment goals. Churning is essentially a form of excessive trading for the purpose of generating commissions for the broker's benefit.
In addition to actually trading stocks for their clients, stock brokers may also offer advice to their clients on which stocks, mutual funds, etc. to buy. This can be problematic if the broker encourages an investor to purchase unsuitable investments or misrepresents the risk or potential pay out of an investment. It also can be problematic when a broker encourages the purchase of unsuitable securities including variable annuities, variable universal life policies, or viaticals. This is especially true if the broker is encouraging investment with funds that will be need for retirement.
Brokers are required to gain authority or permission from their clients before they conduct any transaction on the client's behalf. When brokers act without their client's consent, this is considered unauthorized trading. If your broker is buying or selling stocks on your behalf without your permission, or you believe that any of the other above abuses have been committed, feel free to contact Texas broker fraud lawyer, Jason Coomer for an investigation of a broker fraud claim.
If your retirement savings or other securities investments have suffered substantial losses, generally fifty percent (50%) or more, due to mismanagement, mishandling or misconduct on the part of your broker or financial professional, then you may want to speak to Jason Coomer a Texas investment fraud lawyer to determine if your broker has committed fraud or negligence that has contributed to your losses.
Unfortunately, with the pooling of large amounts of money in pension funds, retirement funds, stocks, mutual funds, bonds, derivatives, commercial real estate, and other investments comes the danger of fraudulent investment scams and broker negligence that can take a person's life savings. If you have lost your life savings or a large some of money through misappropriation of funds, please feel free to submit an inquiry or send an e-mail to Texas broker fraud lawyer Jason Coomer. He may be able to help you recover your losses or at least obtain an accounting of the investments.
Austin broker fraud Attorney, Jason Coomer helps investors that have lost money through wrongful acts of majority shareholders, corporate officers, and brokers. He reviews investment strategies, accounting records, corporate actions, and investor trading; negotiates settlements; and if necessary files claims against negligent or fraudulent brokers. Austin Business Lawyer, Jason Coomer is an experienced business litigation attorney that handles investment fraud, shareholder actions, commercial real estate law, computer law, and other business litigation. His office frequently works with other professionals including Houston Investment Fraud Lawyers, Dallas Broker Fraud Lawyers, San Antonio Investment Fraud Lawyers, and other Austin Investment Fraud Lawyers to provide high end professional legal services at reasonable prices.
Austin broker fraud lawyer, Jason S. Coomer, helps business investors protect their assets and negotiate with negligent brokers and brokers that have committed investment fraud. If you need an Austin Texas Broker Fraud attorney or an Austin broker negligence lawyer to advise you on a Texas investment fraud claim, contact Austin Texas Investment Fraud And Broker Negligence Lawyer Jason Coomer.