Las Vegas lawyer for investment fraud Caution Investors
Keeping Nevada investors up-to-date about potential investment issues
Investment professionals can be a tremendous asset to clients looking to invest their assets in resource-generating securities. However, brokers and investment firms have been known to overlook their clients’ interests when financially motivated by commissions and kickbacks. Our Las Vegas lawyer for investment fraud have seen several cases involving deceit, deception, misrepresentation, and outright fraud. With the dual purposes of educating and helping investors, we are here to assist anyone who has been victimized by broker misconduct or fraud.
The Frankowski Firm believes that with a well-informed investor population, it may be possible to achieve a more transparent and just industry for all. Our lawyers endeavor to alleviate our clients’ conflicts with various investment professionals, and help investors who have sustained financial losses because of the negligence or incompetence of their brokers or brokerages.
What types of investments can lead to a negligence claim?
The Las Vegas investment loss lawyers at The Frankowski Firm have brought successful claims against financial advisors, brokers, and investment firms who have failed their clients. Some of these claims have involved:
- Variable annuities. While variable annuities are often extolled for their tax-deferred status, the reality for many investors is that these long-term investments come with a host of hidden costs, and ultimately offer fewer tax benefits than a typical 401(k). In addition to these unfavorable conditions, variable annuities also bear a higher than average commission schedule, which may entice unscrupulous brokers into pushing clients in this direction, regardless of suitability.
- Mutual funds. Popularized as the workhorse of the investing world, mutual funds are not without their own unique perils. Because of the broad classification, it can be difficult for investors to accurately assess the risk involved in a particular mutual fund. These funds also have many associated expenses and charges that benefit the broker at the literal expense of the investor.
- Private placement investments. Investing in private business is not the point of contention when private placement fraud is mentioned. Instead, it is the lack of accountability and oversight; should a business cease operations, investors have little recourse, as these investments are not overseen by the SEC.
- Unsuitable margin trading. Commissions and fees all exist to provide brokers with a fair and equitable income model. However, when the brokerage firm begins to lend money to clients to finance investments, the firm loses all incentive to provide beneficial guidance to the client, as the firm is repaid and even earns interest regardless of the client’s outcome. As the investor purchases more products, his or her financial debt also increases, which in turn increases the investor’s losses if the investment loses value.
- Master limited partnership (MLPs). MLP investments in oil and natural gas securities can be very risky due to the volatility of global and domestic economic trends in those industries. There are substantial financial incentives for brokers to sell MLPs; however, they are only suitable for a small subset of investors themselves and often result in major losses.
- Real Estate Investment Trusts (REITs). These investments in real estate and mortgages typically involve large upfront fees and surrender costs. Most investors do not understand what kinds of products Real Estate Investment Trusts are, and therefore do not understand the real risks they pose, putting them at risk of substantial financial losses. They often fail to disclose past performance, fees, taxations schedules, and redemption restrictions.
- Penny stocks. Traded at less than five dollars per share, penny stocks may seem like a low-risk investment because of the low buy-in price. However, the reason these investments are priced so low is because they are very high-risk, easily manipulated, and difficult to sell. Purchasing penny stocks in large quantities is typically ill advised.
- Closed-end funds. These investments raise capital only once at their inception through something called an initial public offering (IPO) in which a private company offers sales of its stock. These funds are complex and often lack diversity. They are also professionally managed, and every time they are bought and sold the broker earns a commission.
If you are the victim of investment fraud in Nevada, do not hesitate to get the help you need from an experienced attorney.
Las Vegas investment fraud attorneys defending clients’ interests
Risk is part of what makes investments fruitful, but excessive risk or overlooking client interest is malpractice on the part of financial advisors and investment firms. If you or a loved one has lost money due to investments your broker advised, call The Frankowski Firm at 888.741.7503 or fill out our contact form to discuss your legal options with seasoned Las Vegas investment loss lawyers.