The FBI defines investment fraud as the illegal sale or purported sale of financial instruments. This is a relatively broad definition, so it is not uncommon for defendants to be unfairly accused of committing this offense. To ensure that you are not convicted of an investment-based crime that you did not commit, please call our white collar crime legal team today for help.
What is Investment Fraud?
Investment fraud schemes are generally characterized by making untrue claims about no-risk or low investment offers or:
- Guaranteed returns;
- Overly-consistent returns;
- Complex strategies; and
- Unregistered securities.
The most commonly cited examples of investment fraud include Ponzi schemes, market manipulation, pyramid schemes, and advance fee fraud. However, the government actually considers a much wider range of conduct to qualify as investment fraud, including:
- Binary options fraud, which usually involve allegations of a refusal to credit customer accounts or to reimburse funds to customers, identity theft, and manipulation of software to generate losing trades;
- High yield investment programs, which are defined as unregistered investments run by unlicensed individuals;
- Affinity fraud, which is characterized as an effort to victimize entire groups, usually with a common religion or ethnicity in order to build trust;
- Internet and social media fraud;
- Microcap fraud, which is usually accompanied by claims of market manipulation and the spreading of false information;
- Promissory note fraud;
- Pump and dump schemes, in which promoters are accused of falsely boosting the price of a stock with false statements and then selling their own holdings of the stock en masse;
- Prime Bank investment fraud, which involves offering high yield investments, bank guarantees, and standby letters of credit in false instruments or entities; and
- Pre-IPO investment scheme fraud, which is characterized by the false marketing of shares in internet companies.
Defendants who are accused of furthering these types of scams range from professional investments advisers to private individuals. In either case, false allegations can have devastating consequences, including causing permanent damage to business and personal reputations and job loss.
Unfortunately, many accusations levied against legitimate investment companies are made by disgruntled investors who are merely unhappy with the result of their transactions. To help avoid these types of unfounded allegations, investment-based companies should take great pains to demonstrate their legitimacy by retaining accurate records, refraining from unsolicited communications, maintaining a valid website, and ensuring that investments are registered and that employees are licensed. Although taking these steps will not guarantee that a person or a company will not unfairly be accused of fraud, it can go a long way towards forestalling investigations and preventing unwarranted charges from being filed in court.
Call Today to Schedule a Free Case Evaluation with a Dedicated White Collar Crime Attorney
If you have been unfairly accused of investment fraud, you need the advice of an experienced attorney. Please call Jeffrey S. Weiner, P.A., Criminal Defense Attorneys in Miami at 305-670-9919 to learn more about formulating a strong defense. Initial consultations are free of charge, so please don’t hesitate to call or contact us online.