Stock Fraud FAQs


Stock fraud remains common despite the multitude of federal regulations aimed at ensuring that companies are honest in their financial dealings and investment professionals properly fulfill their fiduciary duties. In recent years, oil and gas investment fraud has caused substantial losses for conservative investors who were told energy investments were safe but ended up losing 50 percent or more of their initial capital due to the collapse of oil prices. This is just one of many examples of fraud which can significantly harm investors and prompt legal action on the part of those who have sustained serious financial losses.

A stock fraud attorney at Zamansky LLC can provide guidance to individuals who have experienced losses due to fraud, mismanagement of investment accounts, deceptive sales practices, and unsuitable financial advice. We take legal action against financial advisors, brokers, and other financial professionals on behalf of investors who have suffered significant investment losses. Far too many victims are unaware of their legal rights and the fact they may be able to recoup the money they have lost. Our legal team has prepared answers to the FAQs below to help potential victims of oil and gas investment fraud and other types of fraud better understand the complex laws and regulations designed to protect them.

FAQs on Fraud in Connection with Stock Investments

  • What are some common signs of investment fraud?

Common red flags include high-pressure sales tactics, offers which sound too good to be true, investment offers based on “secret tips” or “unknown information,” and investment offers which require immediate action. For instance, many investors were sold oil and gas investments with promises of low or no risk and high yields. These promises were misleading as stock prices plummeted when oil prices fell.

  • What types of fraud occurs?

Fraud related to investments can include pyramid and Ponzi schemes, seasonal oil and gas investment scams, churning of investment accounts to earn excessive commissions, misleading information on investment opportunities and a variety of other deceptive and dishonest business practices. Both material omissions and misleading statements about investment products can also constitute fraud.

  • What action should victims take if they suffer investment losses?

Victims should report the fraud to the appropriate regulatory authority and speak with an experienced legal professional to determine what actions may be available to recover compensation for their losses.

  • Do you have to go to court to address investment fraud?

It is often possible to recover financial compensation without going to court. If you have lost money because of a bad broker or financial advisor, you may be eligible to file a FINRA arbitration claim. The FINRA arbitration process is typically quicker and less costly than litigation. In the event that you decide to litigate your case, you may be able to settle your lawsuit without going to court.

  • Should you join a securities class action?

When fraud occurs, many investors often suffer losses due to the same dishonest behavior. A class action is a lawsuit brought against a defendant in which many people are pursuing claims for the same type of losses. If you become part of the class, you will recover compensation if the class prevails against the defendant – with minimal or no involvement in the legal proceedings. However, when you join the class, you give up your right to bring an individual claim. You should always speak with an experienced investment loss attorney before you decide to participate in a class action lawsuit.

  • How can I find an attorney who can help me?

If you suspect you are the victim of fraud in connection with your investment in stocks or other financial products, you should seek a lawyer with specific experience and knowledge of securities fraud cases. Zamansky LLC is a leading securities fraud law firm that will put its legal knowledge to work for you.