In many cases, the operators of financial frauds and Ponzi Schemes the world over rely on people who have already been duped to bring in new suckers. Of course, the ones touting the services of a particular fraudster have no idea they’ve not only been deceived, but that they are helping weave an even larger web of deception. While it’s appealing to let others pick your advisor for you, the best thing to do is ‘trust but verify’ all financial opportunities.
A judge in Virginia federal court ordered a former broker and his alleged accomplice, former Philadelphia Eagles linebacker Merrill Robertson Jr., to forfeit $8 million. The money was allegedly generated by Robertson and Sherman Vaughn Jr. through the operation of a Ponzi scheme which lasted from 2009 to 2016.
Recently, FINRA created a task force to study the problem and discovered that, in the five years from 2012 through 2016, a total of 268 awards (27% of the cases where investors were successful) or $199 million in awards (29% of total damages awarded to investors) have gone unpaid, the report states.
Financial fraudster are getting more creative - and audacious, according to a recent Investor Alert from the FINRA (the Financial Industry Regulatory Authority). FINRA is in charge of keeping an eye on the US Securities Industry. Shockingly, scam artists have recently been using FINRA itself - or its name at least - to separate investors from their money.
From February 2011 to December 2015, Citigroup displayed to investors, brokers, and supervisors inaccurate ratings related to more than 1,800 equities, or more than 38% covered by the firm. These mistakes included the wrong execution recommendations (“buy” instead of “sell”); ratings which were mixed up between securities; or non-ratings for securities which were actually rated.
Thanks to Democratic Representative from Minnesota, Keith Ellison, “The Investor Choice Act” has been introduced to Congress. The act would ensure that mandatory arbitration agreements are prohibited under US securities laws. As investor advocates ourselves, we support your right to choose, once the facts of your dispute have emerged, the venue most advantageous to you.