Investment Fraud

Investment fraud is most commonly committed by overstating assets and understating liabilities. This is done in an attempt to gain investors, to mislead the public in general and to manipulate the market in the offender's favor. Often involved in investment fraud are such actions as: insider trading, accounting fraud, misrepresentation and securities fraud. These actions would be carried out with the willful intention of defrauding individuals of their investments.

Not all responsibility lies with the company or individual accused of investment fraud, however. An investor also has a degree of responsibility to investigate and review an opportunity before moving forward with an investment.

Common Forms of Investment Fraud

Possibly the most commonly known type of investment fraud is a Ponzi scheme. The formula for this investment scheme is relatively straightforward. The schemer promises high returns for investors, using their money to pay previous investors. This type of fraud is named after Charles Ponzi, who conned $10 million from investors in the early 1900s.

Senior investment fraud is another type of investment fraud that is rising in popularity, particularly with the rising costs of health care and the increased life expectancy of seniors, they have become somewhat easy targets for various schemes.

Some other common types of investment fraud include promissory note fraud, sales by unlicensed agents, internet fraud, mutual fund fraud and variable annuity fraud.

If you are interested in learning more about investment fraud, particularly if you have been accused of this crime or are under investigation by the SEC (Securities and Exchange Commission) or similar government agency, you may find it helpful to discuss your options with an attorney.

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