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

The universe of investment scams: common schemes, Part 2

Churning. Reverse churning. Margin trading. Ponzi schemes.

Many readers of our investment blog have likely heard those terms. Hopefully, not many of them have personal experience as investors with the adverse consequences they entail.

How many ways can a criminally inclined money manager find to defraud an innocent investor?

The answer to that is obvious: many.

We spotlight a few of the more common -- mainstream, if you will -- schemes employed by unscrupulous investment advisers and brokers to fleece good-faith customers of their hard-earned savings on our website at The Law Offices of Marc I. Zussman, a Los Angeles securities law firm devoted to the protection of defrauded investors.

Unsuitable investing is a broker behavior that frequently results in our advocacy on behalf of a victimized investor. When a pattern of investment is clearly at odds with a customer's objectives and risk tolerance and results in a portfolio loss, a legal recovery for damages can be pursued.

Such is also the case when an investment professional inappropriately induces a customer to put money into a private investment in lieu of stocks or bonds. High risk often attaches to such investments, with the adverse consequences of a plummeting asset value being starkly clear.

Cold calls to potential customers are often replete with down-the-road dangers linked to misrepresentations, with such communications also frequently employing scare tactics that especially target seniors.

Churning is the strategy of frequent trading in order to generate commissions. The reverse form of that is marked by passive trading of assets that are essentially ignored by a money manager who has received a large annual management fee that dampens any resolve to act with due prudence on behalf of a client. Margin trading is borrowing money from an investment adviser to buy stock. And Ponzi schemes -- often viewed as the pinnacle of fraudulent investment scams -- typically pay back only a select few early investors and ultimately collapse under their own weight, being fueled momentarily only through cash infusions from subsequent investors and not by any legitimate business profit.

A proven securities law attorney who acts solely on behalf of defrauded investors is familiar with all such ruses and additional attempts at deceit, and can provide aggressive and knowledgeable representation aimed at securing the largest possible money recovery for any losses suffered.

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