Learn The Do’s And Don’ts That Maximize Your Odds For Investment Recovery After Investment Fraud Strikes.
Prevention is your best defense against investment fraud, and there are numerous articles on this site educating you on how to avoid investment fraud. However, if you are reading this article it is likely too late for that message.
“One ought never to turn one’s back on a threatened danger and try to run away from it. If you do that, you will double the danger. But if you meet it promptly and without flinching, you will reduce the danger in half.”
Sir Winston Churchill
The typical first response to realizing you are a victim of investment fraud is a combination of anger and embarrassment. You got a raw deal and it does not feel good. You may be tempted to sweep the mistake under the rug and get on with your life by putting it all behind you.
That’s a mistake…
You’re unlikely to be the only victim, and every day the investment fraud goes undetected more people will be hurt by it. By complaining to authorities as quickly and loudly as possible you are doing your best to fight back against the con-man while also increasing your chances of recovering any lost money. It’s not a perfect solution, but it’s the best you can do under the circumstances.
You might be pleasantly surprised to learn that according to Bruce Sankin, an auditor and mediator for NASD, “In 2004, 91% of investors who knew their rights and first mediated and then arbitrated recovered part or all of their investment losses.” That is a valuable and worthwhile statistic to know. It should be highly motivating to take action if you believe you are a victim of investment fraud.
However, to understand the above quote it is important to create a distinction between stock broker fraud at a legitimate firm and investment fraud by the firm itself. Each requires a different course of action to seek remedy.
If you are facing stock broker fraud within a legitimate firm then your first action is to complain in writing to the broker first and the branch manager second. People who follow this procedure are the ones getting the results Bruce is citing above.
However, there are times when the whole company is crooked. In that case pursuing corrective within the same firm is not likely to work so it makes sense to turn to the regulators for additional help. Below is a list of regulatory resources for filing investment fraud complaints when your grievance with the offending firm isn’t getting resolved:
- Securities and Exchange Commission: Email to [email protected] or fax 202-942-9634 or mail to SEC Complaint Center, 450 Fifth St. NW, Washington D.C. 20549. You can also telephone them at 800-732-0330 or 202-942-8090.
- State Securities Regulator: Visit the national web site at http://www.nasaa.org for local regulators and an online complaint form or call 202-737-0900. You can email at [email protected] .
- National Association of Securities Dealers regulatory branch (NASDR) now called FINRA for Financial Industry Regulatory Authority: http://www.finra.org or call 800-289-9999.
- Federal Bureau of Investigation (FBI): You can find local offices on their web site at http://www.fbi.gov
- Better Business Bureau: http://www.bbb.org
- Your local District Attorney’s Consumer Protection Unit
- Your local Postal Inspectors Office if mail was used as part of the investment fraud process.
“Your only obligation in any lifetime is to be true to yourself.”
Always remember… con artists can’t get prosecuted and your money can’t get returned if you don’t speak up. You don’t want the con man to get away with it, do you? The sooner you contact these resources the greater the likelihood that you will stop the investment fraud from victimizing another person like yourself. Help others while helping yourself by complaining promptly.
Who knows, you might even get some of that lost money back…