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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Common forms of investment fraud

Generally speaking, investment brokers and advisors are instrumental in helping investors grow and manage their assets. Their knowledge of particular industries, and their ability to explain the benefits and risks of particular funds can be invaluable. Indeed, a majority of brokers and advisors are client-focused, responsible custodians of client funds. However, there are others who are not.

When brokers offer advice or information based on inaccurate, biased or incomplete information, investment fraud can occur. We believe it is important to educate our readers, this post will focus on the various types of investment fraud. 

Biased investment advice – As we alluded to earlier, when investment advice is based on an advisor’s preference for a particular company instead of well-founded research information, this can be the basis of fraud.

Unfounded advice – One of the elements that investors rely on is an advisor’s ability to research a particular investment in order to procure information that can sway an investor’s opinion of an opportunity. Whenever an advisor fails to do the proper research and advises a client based on the lack of such research, it could be the basis for fraud.

Conflicts of interest – If an advisor or investment firm has a business relationship with an outside company and advises clients on the success or potential of the company, there may be a conflict of interest. This also can lead to investment fraud.

Unnecessary risk – When an advisor persuades a client into buying into an investment that may not be appropriate for their needs or involves substantially more risk than is necessary for the client, this can also be the basis for fraud. 

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