There are many investment choices out there, and savvy investors are always looking for options that will get them the best returns. The investment opportunities available to consumers are so endless and ever-evolving that regulators even find it challenging to keep up with how different strategies work.
Unfortunately, many investors aren’t willing to accept that all investment choices come with some risks. They may report such concerns to regulators, resulting in an investigation into your operation. Complex situations may result in securities fraud charges.
What are some of the more common reasons government officials file securities fraud charges?
It’s not uncommon for those in the financial services industry to face securities fraud allegations in situations where there’s a nuanced investment option that consumers or regulators don’t fully understand.
Another instance in which a financial advisor or investment portfolio manager may face securities fraud allegations is failing to uphold their fiduciary duty. Their responsibility is to keep their board of directors or shareholders abreast of accurate information about the company they represent or invest in.
Any instance in which a financial advisor purposely misleads an investor into making certain investment choices that they’re previously aware wouldn’t benefit them may also constitute securities fraud. So could insider trading or tipping off stockholders about privileged information about a stock before it becomes widely available to investors and the general public.
Why you need to take securities fraud allegations seriously
While an investment strategy that you convinced an investor to use may have been a valid one, regulators may not see it the same way. Seeking experienced legal guidance is wise.