Our firm represents corporations whose stock value has been negatively affected due to fraud commitment by Hedge Funds. Typically an unscrupulous Hedge Fund will obtain a report on the target corporation from a supposed legitimate and independent stock analyst. The Hedge Fund will usually provide unsubstantiated negative information about the corporation for inclusion in the report. At the same time the Hedge Fund is taking substantial short positions in the corporations stock. Thereafter when the report is released to as many outlets as possible the natural effect is a rapid decline in the stocks value and the Hedge Fund cashes in on its short positions. If your corporation or a corporation in which you have substantial investments has been the victim of this improper activity our law firm can help you.

In addition to the foregoing, below is a list of some of the most common investment fraud abuses perpetrated by unethical brokers and investment advisors:

Conflict Of Interest

A conflict of interest arises when a company provides stock analysis for its own investment banking clients and for firms whose business it wants to gain. Analysts may feel obligated to rate these clients' or potential clients' stock highly (when, in fact, they are not that valuable) because they want to maintain good business contacts. This is a clear conflict of interest, because a stock analysis is supposed to be objective. While such actions may greatly benefit the companies involved, at least in the short run, it is ultimately the investors who suffer. Investors may squander their life savings or retirements on stocks that have been touted by stock reports but that are in fact worthless. Conflicts of interest are illegal. If you or a loved one has lost money as a result of a conflict of interest, contact our office today.

Variable Annuities

Variable annuities are essentially contracts that offer clients future payments on their investments. These payments fluctuate in response to the rise and fall of the value of mutual funds and other managed funds. Recently, a number of brokers and corporations have been accused of variable annuity fraud. Some of the most common methods of such investment fraud include churning of accounts to increase profits, charging exorbitant fees, false disclosures (such as failure to expose risks or the misrepresentation of benefits), and preferential treatment. If you suspect that variable annuity fraud is to blame for your financial loss, we can help. Please contact our law firm today.

Suitability Claims

When making an investment recommendation to a client, a broker must make recommendations that are consistent with the customer's risk of tolerance, needs, and investment objectives. A broker has a legal duty to know his client and only recommend investments and trading strategies that are suitable for that client. An investment may be unsuitable if a customer does not have the financial ability to incur the risk associated with a particular investment, if the investment is not in line with the investor's financial needs, or if the customer does not know or understand the risks associated with certain investments. Should a broker breach this duty and make unsuitable recommendations to a client, the broker may be guilty of investment fraud and held liable for the client's losses. Unsuitability claims are serious. If you believe you have been urged to make an unsuitable investment by your broker, our practice can help.

Misrepresentation

When a broker fails to disclose important information about a stock or publicly supports a stock that he personally knows is worthless, he is committing misrepresentation. Misrepresentation lures clients to invest their hard-earned funds into businesses that may be troublesome or facing serous financial difficulties, such as debt. If you have lost money as a result of misrepresentation, we can help.

Unauthorized Trading

Unless you have signed discretionary papers giving your broker permission to make trades in your account without your authorization, your broker is required to obtain your permission before buying or selling securities for you. Many unscrupulous brokers place transactions in customer accounts without authorization: when clients call to inquire, the broker tries to convince them to retain the shares because they have increased in value or will increase in value. This activity is sometimes blamed on "computer errors." Either way, if a broker has entered an unauthorized transaction in your account, chances are that this was not an isolated event. If you are the victim of unauthorized trading, a form of investment fraud , you must take action. Failure to do so may be deemed tacit approval of what the broker has done. Should the price of a security go down, you cannot successfully take action at a later date if there is documentation to indicate your awareness of ownership of that particular security. If you suspect unauthorized trading, please contact our law firm near today.

Stock Options

When it comes to employee stock options, dishonesty, misrepresentation, and outright fraud are quickly becoming serious problems. Many companies are believed to have lied to their employees about the value of their stock options and about the potential for the shares' value to skyrocket. Some executives worked hard to ensure the value of their own shares but failed to inform their employees about how they could do the same. As a result, employees have lost an estimated 1.5 billion in just the past few years. If you have lost money on your employee stock options because your employer was dishonest, we can help. Please the Law Office of T. Michael Kennedy today.

Hedge Funds

Hedge funds are an alternative form of investment that pool investors' money and invest it in a variety of markets in hopes of yielding a positive fund. But unlike many other types of investment, such as mutual funds, hedge funds are not regulated by or registered with the Securities and Exchange Commission (SEC). In some cases, hedge fund managers have lied to investors about the value of the funds and their histories of success. Others have gone as far as to steal the investors' money and produce phony account statements for the investors to conceal the theft. To avoid hedge fund investment fraud, follow these tips: be sure you understand the fund before you invest, research the backgrounds of the hedge fund managers, and don't be afraid to ask questions. If you have been defrauded and lost money on a questionable hedge fund, our practice can help.

Churning (Excessive Trading)

Churning occurs when a broker engages in excessive trading on your account. He may "churn" the account in an attempt to generate added commissions. Frequently, the broker will sell the winners to show a small profit and keep the losers. In order for overtrading to constitute churning - a greater offense - the broker must exercise control over the trading in the account and abuse the customer's trust by engaging in transactions that are excessive in volume and frequency. A high rate of turnover in an account, frequent trading into and out of a single stock, and large brokerage commissions often indicate churning has occurred. If a broker is buying and selling securities in your account (consequently generating seemingly excessive commissions) and always has some reason why you should take quick profits, there is a good chance your account is being churned. Churning is a form of investment fraud and is punishable under state and federal securities laws. If you believe you are a victim of churning, please contact our practice.

Insider Information

Martha Stewart made international headlines for her fraudulent use of insider information to unload thousands of shares of stock before they could plummet, helping her save millions but costing unknowing investors millions. She's since been found guilty. Usually provided as a "tip" from investment brokers, stockbrokers, stock analysts, and company employees who have access to key information, insider information gives certain privileged clients important news about stocks - such as if their value is about to skyrocket or hit rock bottom - before everyone else even knows the news. Such unfair advance notice is illegal - no one is permitted to buy or sell stocks based on this prior knowledge. If someone's use of insider information has caused your financial loss, we can help. Please contact us today.

Risky Investments

A risky investment is made in any stock that can draw a substantial profit but also a significant loss - sometimes the entire investment and possibly more. Unethical stockbrokers, because they can earn so much commission on a stock that can yield a sizable profit, often encourage investors to purchase risky stocks, which may include start-up or new media company shares. Such bad advice is not only potentially costly to the investor, but it is also illegal. If you believe you have been lured into making a risky investment, contact a lawyer today.

Malpractice

Malpractice is defined as when a professional inflicts harm upon or injures a client, consumer, or patient by not following the acceptable standards for professionalism and/or safety. Specifically, financial malpractice occurs when a broker or funds manager offers a client or investor deceptive, unfounded, misleading, or dangerous advice, which may lead an investor to make a risky investment or unwittingly buy suspect stock and ultimately lose money. If you have been victimized by brokerage malpractice, please contact us today.

If you have been a victim of any of these unethical practices, please contact our law firm today.