On behalf of Mihalek Law posted in Securities Law on Friday, April 24, 2015.
While it is of course possible that investors of any age could be targeted and stolen from, older investors may be particularly susceptible. There are likely multiple reasons for this beyond the obvious vulnerability of many who fall into this demographic. With old age right around the corner they may be concerned about having the finances necessary to cover health care needs that could arise. In other cases, they are a group that may have the money to place in an investment.
Regardless of who is impacted by broker misbehavior, it is illegal and investors may be able to recoup compensation for their loss. FINRA and the Securities and Exchange Commission recently took action against the operators of a scheme that involved selling unregistered stock. The operators were charged with fraud. In addition, their assets were frozen. Investors working with several brokers may decide to take legal action.
Investors who were caught in this scheme were roped in via cold calls and were led to believe that their investment would be put toward the development of an online job staffing business. In reality however, the money, which was procured from more than 400 investors, was hidden and diverted to the brokers.
There are very strict rules regarding what a broker can do with investment funds he or she secures. These rules are designed to protect the often unsophisticated investor from being taken advantage of. While the process of recouping these investments can be tricky, it is a possibility that many nonetheless pursue. Because of the complications, working with a lawyer is usually a good idea.