Securities Fraud Law Firm for Investors Who Need to Recover Fraudulent Investment Losses
As an individual investor, you enjoy substantial protections under U.S. securities laws. These laws protect investors against fraud, and they entitle investors to financial compensation when they suffer fraudulent losses. But, asserting your rights under these laws is not easy; and, to make sure you have the best chance of recovering your fraudulent losses, it is important to work with an experienced securities fraud law firm.
Our firm has been helping investors recover their fraudulent losses for decades. Located in the heart of Wall Street, we represent individual investors in securities arbitration, securities fraud litigation and FINRA arbitration nationwide. We also handle class action lawsuits when multiple investors suffer losses due to the same fraudulent market activities, and we routinely conduct investigations focused on uncovering all forms of securities fraud.
What are the Securities Fraud Laws that Protect Investors?
There are several securities fraud laws that protect investors in the United States. These laws address all forms of securities fraud, from insider trading and other forms of corporate securities fraud to fraud committed by investment brokers and advisors. Some of the most important laws that protect individual investors include:
- Securities Act of 1933 – The Securities Act of 1933 was the first major piece of federal legislation in the U.S. that was specifically designed to protect individual investors. Among other key provisions, the Securities Act of 1933 requires companies to make financial disclosures when offering securities to the public, and it specifically prohibits misrepresentations and other deceitful practices.
- Securities Exchange Act of 1934 – The Securities and Exchange Act of 1934 created the U.S. Securities and Exchange Commission (SEC), which is the federal agency primarily responsible for regulating the securities markets in the United States. It also established various requirements for securities trades conducted between investors and companies other than the securities’ original issuers.
- Investment Company Act and Investment Advisers Act of 1940 – These laws establish public disclosure requirements and other legal obligations for investment companies, mutual funds, and individual investment advisers.
- Sarbanes-Oxley Act of 2002 – The Sarbanes-Oxley Act of 2002 (commonly known as “SOX”) was the direct result of the Enron and WorldCom securities fraud scandals around the turn of the century. It expanded on the requirements established under the Securities and Exchange Act of 1934, and it established several completely new requirements with regard to corporate responsibility, financial accountability, and securities-related disclosures.
- Dodd-Frank Wall Street Reform and Consumer Protection Act of 2020 – This law, often simply referred to as the Dodd-Frank Act, was another responsive piece of legislation—in this case, enacted to address the fallout of the 2007 financial crisis. Among other key provisions, the Dodd-Frank Act established accountability and transparency requirements that expanded on those established under SOX in order to help protect unwary investors from securities fraud.
When Can Individual Investors File Claims for Securities Fraud?
So, those are some of the main securities fraud laws that protect individual investors in the United States. Now, when can individual investors use these laws to pursue claims for securities fraud?
The laws discussed above (among others) prohibit many different types of fraudulent practices. When corporations, hedge funds, advisory firms, and individual brokers and advisers violate these laws—and when investors suffer fraudulent losses as a result—aggrieved investors can use these laws to seek financial compensation. Some of the more common examples of securities fraud include:
- Breach of fiduciary duties
- Charging excessive fees and commissions
- High-yield investment fraud
- Market manipulation
- Ponzi schemes, pyramid schemes and advance-fee schemes
- Omission or misrepresentation of material information
- Theft, embezzlement, and other crimes
- Trading on inside information not available to the public (insider trading)
- Unauthorized trading and account churning
Again, these are just some of the more common examples. Securities fraud can take many other forms, and companies, firms and scam artists are becoming increasingly sophisticated in their efforts to defraud individual investors. Email and social media scams are a daily risk for investors, boiler rooms have made something of a comeback in recent years, and affinity fraud scams (scams targeting particular groups) perpetrated by community leaders and others cost many unsuspecting investors their entire life’s savings.
How Can Investors Prove that They are Victims of Securities Fraud?
Recovering fraudulent investment losses begins with proving that you are a victim of securities fraud. This requires proof of five key “elements”:
- Fraudulent Conduct – You must be able to prove that a company, firm, fund or individual committed a fraudulent act. This could be anything from withholding material information to conducting unauthorized trades.
- Intent – Generally speaking, an inadvertent mistake is not enough to give rise to a claim for securities fraud, nor is providing sound advice that ends up leading to market losses. In order to establish a claim for securities fraud, it is necessary to prove that the act or omission in question was committed with intent.
- Reliance – Even if a company made a material omission or your advisor had a conflict of interest (which resulted in a breach of his or her fiduciary duty), you are not a victim if you did not rely on the omission or advice in question. But, if you did rely, then you may have a claim for securities fraud.
- Damages – You must also be able to prove that you suffered damages. These are your fraudulent investment losses; and, while this is generally the easiest element to prove, you must still be able to clearly identify which of your investment losses are the result of the fraud in question.
- Causation – Finally, you must be able to prove that your reliance on the fraudulent act or omission in question caused your damages. If your losses were the result of ordinary market factors that simply coincided with fraudulent conduct, this alone is not enough to establish a claim for securities fraud.
Contact Our Securities Fraud Law Firm Today
Do you think you may have a claim for securities fraud? If so, it is extremely important that you speak with a lawyer right away. To discuss your situation with an experienced securities lawyer at Zamansky LLC, call 212-742-1414 or request a free consultation online now.