If you are the victim of securities fraud, you may be dealing with more than financial losses. There may also be identity theft issues, damage to your credit rating, and emotions that may range from anger to fear to frustration. In fact, a study conducted by the FINRA Foundation found that up to 66 percent of security fraud victims experienced stress, anxiety, depression, and insomnia.
If you have been a victim, these steps can help you not only recover some of your financial losses, but may also help you restore your credit and your identity.
Collect Relevant Documentation
The first step in recovery is to collect any documents related to the fraud and place it in a secure location. Create a contact sheet with the name, mailing address, email, and phone numbers of the person you suspect has committed the fraud. If there is a website address, include that as well along with any regulatory registration numbers you were given.
Create a timeline of events, even if it spans several years. You will also want to print your most recent credit reports from all three reporting agencies. This will help your attorney to prove your case.
Report the Fraud
Once you have all the documents, you want to report the fraud to the proper authorities. The first place to file a report is with the local police. Be sure to file the police report with your other important documents. Other places you may want to file a report include:
- Federal Bureau of Investigation
- Federal Trade Commission
- Internet Crime Complaint Center
- Local District Attorney
- National Association of Insurance Commissioners
- National Futures Association
- North American Securities Administrators Association
- Securities Exchange Commission
- State Attorney General
- U.S. Commodity Futures Trading Commission
The U.S. Securities and Exchange Commission also strongly encourages the public to submit any tips about securities fraud, and they have created a web page specifically for this purpose.
Hire an Attorney
If you suspect you have been the victim of securities fraud, you will also want to hire an attorney who specializes in these cases. There are many examples of securities litigation, from individual civil lawsuits to class action suits when many investors are impacted. An individual lawsuit would be filed solely on your behalf and only you would collect any damages awarded by the court.
In a class action suit, other investors join you in the litigation. These are investors who may have purchased the same types of securities or purchased them in the same date ranges when the fraud allegedly occurred. There are also several different types of securities fraud.
Individual securities fraud occurs when one stockbroker, investment banker, or analyst engages in fraudulent activity, such as providing false information to inflate stock prices or insider trading. Investment schemes, also known as Ponzi schemes, are also a type of securities fraud.
In Ponzi schemes, investors are solicited for funds and those contributions are then used to pay the earlier investors. Bernie Madoff was found guilty of such a scheme in 2008. Corporate securities fraud like this occurs when the entire company is engaged in illegal practices, like Enron in the early 2000s or the subprime mortgage crisis in 2007.
If you believe you have been the victim of securities fraud, it is important that you contact a securities fraud expert to learn what rights you may have. An attorney will review your case to determine if any fraud has been committed and then guide you through the next steps in order to get you the compensation you are entitled to under the law.
This article is a collaboration with a freelance writer and follows The Haitian Times publishing guidelines.