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

How damages in securities fraud cases can be calculated

Victims of securities fraud largely have two concerns: how to get their money back, and how to prevent being swindled again. Because of this, they may not understand the different forms of damages that may be obtained as part of a securities fraud lawsuit.

To the uninitiated, there are several types of damages that can be made available, and each of them depends on the actual damages suffered due to fraud. This post will highlight a few of them. 

Compensatory damages – Simply put, this calculation takes into account what the investor would have had if not for the fraudulent actions of the broker or investment firm. The calculation of compensatory damages could include a money-in/money-out consideration, or reviewing the number of improper trades and the value of them.

Market adjusted damages – It is also important to consider the value of what the account would have been if not for the broker’s fraudulent actions. Because of this, it is important to consider how the account would have performed given ideal market conditions. As such, performance based metrics can be added to out-of-account losses when considering damages.

Interest on losses- If requested, an award of interest on the losses suffered can be included. This essentially means that there will be an interest payment (commonly 6% per annum) that will be included on payments made over time.

Punitive damages – Sometimes, the measure of compensatory damages is not enough to compensate the investor for the losses he or she suffered. Punitive damages are awarded to punish the perpetrator for the ancillary, yet very hurtful injuries that investors may suffer aside from losing principal and interest. 

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