The Role of an Investment Fraud Lawyer in NYC

When you have invested substantial sums of money in hopes of advancing your future, and someone with bad intentions steals those investments, it can be devastating. If you’ve been the victim of investment fraud, seeking the guidance of a qualified investment fraud lawyer can help you recover your financial losses.

A lawyer can assist you during a FINRA investigation or a criminal prosecution. If you are facing federal charges, it is vital to seek counsel immediately.

Misrepresentations and Omissions

An investment fraud lawyer in NYC could help investors recover losses from misrepresentations or omissions financial professionals commit. Misrepresentation claims involve material statements or omissions that affect investment decisions. These claims are more complex than negligence or fraud cases because they must prove reliance, damages, and causation under the law of New York and federal securities regulations such as Rule 10b-5.

For a claim of misrepresentation or omission to rise to the level of fraud, there must be scienter or intent to deceive. In other words, the perpetrator of the fraudulent misrepresentation must understand that there is a high likelihood that it will not be believed or acted upon by the investor.

Unscrupulous investment advisors or brokers try to cover up their fraudulent behavior by inventing explanations. For example, they may tell investors that losses are a natural part of investing and should be expected or that market volatility results from governmental regulation or political events.

If you have sustained financial losses based on your broker’s misrepresentations or omissions, an experienced investment fraud attorney should be consulted. An investment fraud lawyer can thoroughly assess your case, explain your legal options, and help you recover any financial losses you have suffered due to the defendant’s conduct.


Stockbrokers and other financial advisors must make investment recommendations that are “suitable” for a client’s circumstances and goals. Suitability is not only a regulatory requirement, but also a fiduciary duty, and brokers that breach this duty may be liable for damages.

Examples of unsuitable transactions include:

  • Excessive churning (buying and selling securities to generate commissions).
  • Private securities trading.
  • Over-concentration in a single sector or product.

These types of investments can be hazardous and are particularly vulnerable to market fluctuations. Moreover, senior citizens may be more likely to be duped into these investments.

Many investment fraud cases involve violations of state and federal laws, including the Securities and Exchange Acts, Blue Sky laws, and insider trading. A qualified NYC investment fraud attorney will help clients pursue civil and criminal remedies against the wrongdoers, including recouping losses.

Suppose you have been the victim of investment fraud and are facing a federal criminal investigation by the SEC, FINRA, or FBI agents. If you have received a subpoena or search warrant for your financial records, taking appropriate steps to comply with legal requirements while protecting your rights is crucial. In that case, you need an experienced white-collar defense attorney immediately. These cases often lead to federal charges, and a conviction could result in multi-million dollar fines and decades behind bars. 

Securities Arbitration

Many investors have signed arbitration agreements — often in the form of a small clause embedded within larger financial or brokerage contracts — that require them to arbitrate disputes with their broker or financial investment adviser. 

Like any case, these matters are complicated and demand the attention of a skilled lawyer. 

Many cases are settled through mediation, in which opposing parties meet voluntarily with a neutral third-party mediator to discuss their dispute. 

Acting quickly when confronted with a securities or investment fraud claim. A successful defense requires knowledge of the complex legal and regulatory areas and a deep understanding of how brokers and financial institutions conduct their business. The average federal criminal sentence for this type of offense is more than four years in prison, and attorneys are ready to protect your freedom and future.

Ponzi Schemes

The financial industry is built on relationships and trust. Stockbrokers spend years cultivating these relationships so that they can conduct securities business with investors, and investors expect to be able to rely on their brokers to act in their best interests. Unfortunately, investors can suffer devastating losses when brokers breach that trust to line their pockets. When this happens, hiring an investment fraud lawyer may be necessary to recover lost funds.

Ponzi schemes are fraudulent investment programs that promise artificially high rates of return with little or no risk. The perpetrators of these schemes often pay returns to early investors from the money of later ones. These schemes usually do not conduct actual business and tend to collapse when the flow of new investments slows or stops. 

Investors should always be wary of any investment that promises unreasonably high returns, especially in a short time. It is also essential to be cautious if the investment needs to be registered or licensed. Legitimate companies and securities brokers must register with state and federal regulators so that investors can easily access the information they need to make informed investment decisions. A stockbroker who refuses to be written may have something to hide.