Rhode Island Investment Fraud Lawyers

Malecki Law’s investment fraud lawyers are alerting Rhode Island retirees and investors that they should be on alert for Ponzi schemers and fraudsters, who are always lurking. Securities fraud can happen to anyone, even investors who are knowledgeable about the financial markets. Fraudsters can often go undetected in their crimes by finding legitimate cover as financial advisors within larger financial institutions. Financial investment firms have a duty to supervise their employees, even for outside business activities conducted away from their workplace. Ponzi schemers often turn out to be financial advisors at brokerage or investment advisory firms who are selling fake investments away from the accounts at their firm. Meanwhile, trusting investors of the firm are led to believe that the firm is dutifully watching over, which is not necessarily the case.

Rhode Island’s Department of Business Regulation Securities Division listed its “Top Investor Threats for 2021,” which included a forecast of “a continued effort by bad actors trying to swindle investors, leveraging the fear and anxiety related to changes in both the financial market and the economy due to COVID-19 by illegally selling securities.” The Securities Division’s Chief of Securities, Donald DeFedele, added that bad actors often try to lure in investors with the promises of high returns, but that if the offer sounds too good to be true, then further scrutiny is needed:

“The most indicative sign of an investment scam is an offer of guaranteed high returns with no risk. All investments carry a risk that some, or all, of the invested funds could be lost. ‘Anyone who says their investment offer has no risk is not being honest,’ Mr. DeFedele said. ‘Investing is a long term proposition. Get-rich schemes are built on empty promises and empty pockets.’ Mr. DeFedele recommends that investors should always ask if the salesperson and the investment itself are properly licensed or registered. This information can be easily confirmed by state and provincial securities regulators. ‘Working with a properly licensed investment professional affords investors certain legal protections,’ he said. ‘Offering to sell an investment without a license is against the law.’”

While Rhode Island’s Securities Division continues to bring enforcement actions against well-known firms like LPL Financial and Morgan Stanley for supervision failures and other securities violations, investors who have suffered losses from scammers and Ponzi schemers cannot always rely on being made whole by long regulatory investigations, which are opaque and difficult to know how they’re progressing. While regulatory investigators usually seek documents and cooperation from investor victims, they typically do not share documents in return regarding other investors who may have suffered similar losses.

Regulatory investigations also do not always seek to prosecute the full time period of the violations that occurred, meaning victims expecting restitution may only receive a small fraction of their losses, even after years of investigation. This is why it is critical for investors who have been victimized to additionally seek counsel from securities fraud attorneys and an experienced investment loss recovery law firm to consider pursuing a parallel civil lawsuit against the financial institution. In FINRA arbitration, investors can expect their cases to be resolved within 12 to 15 months depending on the availability of arbitrators and the parties’ counsel. Elderly and disabled investors may also qualify for expedited proceedings, which can bring a resolution several months faster. This is far faster than what you can expect from a regulatory proceeding, which some cases may never reach a conclusion.

Malecki Law is a national securities fraud law firm that has recovered tens of millions of dollars for investors from large financial firms, including LPL and Morgan Stanley. Hiring knowledgeable, investment loss recovery lawyers is the first step towards recovering investment money lost to negligent firm supervision or other misconduct. If you are a Rhode Island resident who has lost money in the financial markets and would like a free consultation about whether your account was properly managed, contact the investment fraud lawyers at Malecki Law.