Signs of Investment Advisor Fraud
In some ways, the client-investment advisor relationship is extremely similar to the patient-doctor relationship. If you can’t trust your investment advisor to always act with your best interests in mind, you’re going to wind up in worse shape than you began in.
The securities markets are complicated, and successfully navigating them to financial success is no easy feat. Millions of investors rely upon investment advisors to guide them through the maze of the stock market and onto smart trades and transactions.
Some unethical advisors scam their clients, however. When this happens, not only does the advisor deserve to be brought to justice, but the fraud could also be brought to the SEC, who might pay out a whistleblower reward once the investigation is complete.
With that in mind, it pays to be aware of some of the most common signs of investment advisor fraud.
Guaranteed and Suspiciously High Returns
No matter how good someone is at reading the stock market, no one is good enough to make trades and transactions with absolute certainty of a positive end result. Investment advisors who guarantee a return are breaking the law and committing offering fraud. They’re either just trying to get investment advisors to give them money that they can make off with or they’re using some other scheme to supplement the actual returns to make them always positive, such as a pyramid scheme.
One of the hallmarks of securities fraud is that the investor needs to act immediately in order to avoid missing out on an amazing opportunity. An investment advisor who attempts to get you to make a transaction or sign an agreement without first getting all the information is likely not being honest with you.
You should always take the time to learn all the facts. If the investor simply keeps pushing, it’s probable that there aren’t any facts to give and that you’re being scammed.
Lack of Real-Time Data
The key to avoiding becoming the victim of an investment scam is making a point of being informed. Your investment advisor should be able to provide you with real-time data of all trades being made on your behalf.
In the past, the SEC has busted investment advisors for making trades without specifying whether the trades are for a client or the firm. These advisors wait to see how the trade plays out. If the result is positive, they backdate it to be for the firm; if the result is negative, they backdate it to be for a client.
You can avoid this happening to you by demanding that your investment advisor provide you with real-time data regarding trades made on your behalf.
Expose Investment Advisor Fraud to the SEC
If you believe that your investment advisor is scamming you, or if you’ve discovered fraudulent investment advisor activity through independent analysis, Meissner Associates can help you report it to the SEC. As a whistleblower, you could be eligible for a monetary reward worth millions of dollars.
Find out how good your information is by signing up for a free, confidential tip evaluation today. Just complete the form found at the bottom of this page, or simply call our office directly at 1-866-764-3100.