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Investment Fraud and Broker Negligence

Ponzi Schemes

 Many people have heard of  “Ponzi” Schemes because of scammers like Bernie Madoff and Allen Stanford.  However, most people aren’t aware that there are dozens, if not hundreds, of Ponzi schemers that run these schemes throughout the country, albeit on a smaller scale.  However, Ponzi Scheme victims are just as financially devastated as many of the victims in the Madoff or Stanford schemes, if not more.

A Ponzi scheme is a type of investment scam where the schemer (sometimes a licensed financial advisor or stockbroker) uses funds from one investor to pay off another investor.  The schemer often uses money from new investors to pay off previous investors, usually referring to these payments as “interest” or “dividends”, giving the investor a false sense of security that their investment is safe and generating income.  Moreover, the schemer often uses investor money to fund a lavish lifestyle instead of investing the money as promised. Eventually, when the schemer is unable to secure additional funds from new investors, the money dries up, the scheme collapses, and investors are left with substantial losses.

Unfortunately, many Ponzi Scheme victims are solicited into these bogus investments by their financial advisor or stockbroker.  In some cases, the victims may be able to sue the brokerage firm that the advisor works for or is affiliated with, because brokerage firms have a duty to reasonably supervise the activities of their brokers under FINRA Rule 3110 (and former NASD Rule 3010).  If the brokerage firm fails to adequately supervise their advisor, they may be liable to the investor for their losses.

Our attorneys have represented hundreds of Ponzi scheme victims throughout the country, including areas in Chicago, Western Illinois, Los Angeles, San Diego, Houston, Tampa, Tulsa, Detroit, Denver, Salt Lake City, Boise, and many other cities.

Israels & Neuman PLC is a securities law firm that represents investors in FINRA arbitration proceedings in all 50 states.  Our attorneys have represented over one thousand investors against many brokerage firms in the past, including LPL Financial, Merrill Lynch, Morgan Stanley, Smith Barney, Stifel Nicolaus & Company, UBS Financial Services, Oppenheimer, Charles Schwab, Wells Fargo Advisors, Ameriprise Financial Services, Raymond James Financial Services, ProEquities, Securities America, National Securities Corp., and many others.

All of our financial arbitration cases are taken on a contingent basis, meaning that we do not get paid unless we recover compensation for you.

If you or someone you know has been a victim of a PONZI scheme, CONTACT ISRAELS & NEUMAN at (720) 599-3505 for a Free Case evaluation.

 

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