Investor Fraud Lawyer in California
While investor fraud can result in significant monetary losses, it’s also a betrayal of trust that causes devastating emotional distress for victims and their families. At Cutter Law, our investor fraud lawyers understand the financial and emotional difficulties you’re facing and are ready to help you take legal action. We combine our legal knowledge and experience with compassion and support to fight for justice and help you rebuild your financial security.
Every year, there are unethical people or businesses that attempt to take advantage of investors. Securities and investment fraud increased more than 24 percent from 2023 to 2024, with about $5.7 billion lost to these deceptive business practices in the United States.
If you or a loved one were a victim of an investment scam or financial advisor misconduct in California, you are not alone. Cutter Law has the skills and resources to protect and advocate for your rights. Our investor fraud lawyers offer free case evaluations to discuss possible avenues to file formal complaints and pursue compensation for your losses. Contact us to schedule a free consultation today.
What Is Investor Fraud?
Investor fraud occurs when financial professionals or firms deceive or mislead people into investing their money into schemes, fraudulent products, or fictitious businesses. In many cases, those committing the investment fraud make false promises, such as guaranteed high returns, very low risk, or hiding risks completely.
Fraudulent investment practices can also involve directors and business leaders violating their fiduciary duty to act in the best interest of shareholders for their own personal gain.
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Why Choose Cutter Law for Investment Fraud?
Cutter Law is a multi-generational, family-owned firm that works collaboratively to help our clients seek compensation for their losses. Unlike large, corporate law firms, our investment fraud attorneys in California work together on every case, combining our skills and experience to provide exceptional service that goes beyond the courtroom.
Our experienced team of attorneys strive to make personal connections with our clients to hear their stories and understand their struggles. We know how financial loss can affect the entire family and are committed to doing everything we can to demand financial compensation on their behalf.
When you work with our investment scam attorneys, you can expect to be treated with respect, patience, and compassion. We prioritize open communication and extend the care we feel for our own family members to you. Speak with our securities fraud lawyers to learn more about your rights and why clients trust us to handle their investment fraud cases.
Common Types of Investment Fraud
Fraudulent investment tactics can come in many different forms. Our skilled attorneys have experience handling several types of business litigation claims related to these common types of investment fraud.
Broker or Advisor Negligence
Broker or financial advisor negligence happens when they fail to fulfill their duty of care and cause preventable losses for their clients. This may include:
- Giving false or careless investment advice
- Performing inadequate research before making recommendations
- Unauthorized trading without the client’s knowledge
Although investment fraud is defined by intentional deception, broker or advisor negligence can occur even when the harm was not intended. A stockbroker negligence attorney can help prove negligence by establishing that the advisor breached their legal duty to their clients, which resulted in financial losses.
Misrepresentation or Omission of Facts
Making false claims or failing to disclose crucial information about investments may be considered fraud. Here are examples of misrepresentation in investments:
- Misrepresenting the financial health of a company to investors
- Exaggerating potential returns from an investment
- Not mentioning known risks that could potentially affect a stock’s value
- Failing to inform investors of fees that come with the investment
Ponzi and Pyramid Schemes
Both ponzi and pyramid schemes are considered investment fraud because they falsely promise high returns quickly. However, the schemes ultimately fail because they rely on continuous recruitment of new investors or using incoming investments to pay earlier investors, which are not sustainable business models.
If you’re unsure whether you were harmed by one of these fraudulent businesses, connect with one of our ponzi scheme lawyers in California.
Affinity or Elder Fraud
Affinity fraud is a type of investment fraud that targets particular groups. The person committing the fraud might pretend to be a member of the group, such as a church, social group, or professional association, to gain trust. They then scam victims into making fraudulent investments.
Elder fraud exploits older adults who are vulnerable to deceptive financial tactics. It may involve stealing or misusing the older person’s money or assets.
Excessive Trading
When a financial advisor or broker recommends frequent buying and selling, also known as churning, they may be unethically attempting to collect higher commissions. A broker fraud lawyer can help you determine if a financial advisor is engaging in deceptive business practices.
Forgery or Unauthorized Transactions
Affinity fraud is a type of investment fraud that targets particular groups. The person committing the fraud might pretend to be a member of the group, such as a church, social group, or professional association, to gain trust. They then scam victims into making fraudulent investments.
Elder fraud exploits older adults who are vulnerable to deceptive financial tactics. It may involve stealing or misusing the older person’s money or assets.
Promissory Note Scams
A promissory note scam involves the sale of fake promissory notes to investors with the guarantee of high returns. The scammers often use high-pressure tactics to close the deal.
False Statements About Returns or Risk
It is unlawful to make untrue statements about investments, such as promising high returns and downplaying the riskiness of a stock.
How To Know if You’ve Been a Victim of Investor Fraud
If you suspect you or a family member has been the victim of an investment scam, here are red flags to look for:
- Your financial advisor made trades without your permission.
- You were promised “guaranteed” or “risk-free” returns on your investment.
- Your account suddenly has unexplained losses or excessive fees.
- Your broker is pressuring you to buy or sell specific stocks.
- Your broker discouraged you from reviewing financial statements or asking questions about an investment.
What Laws Protect Investors in California?
California has strict laws to protect investors from potential scams and fraudulent practices, including the California Corporate Securities Law of 1968 (CSL), the Unfair Competition Law, and the Elder Abuse and Dependent Adult Civil Protection Act.
The CSL is the primary investor protection law that requires any securities to be qualified and for the security issuer to register with the state. The law also makes it illegal to conduct fraudulent practices. Other California laws generally prohibit deceptive business practices and targeting vulnerable groups with investment scams, including older adults.
Additionally, the Financial Industry Regulatory Authority (FINRA) provides dispute resolution services (DRS) to help investors and firms reach a resolution through mediation and arbitration. This is another recovery option outside of the official court process, which can be lengthy and complex.
Available Remedies in California
The CSL and other federal securities laws offer legal remedies for those affected by fraudulent investments and scams, including:
- Recovery of lost funds: You can file an individual civil action or join a class action lawsuit to claim monetary compensation for your financial losses due to the fraud.
- Rescission of fraudulent contract: This court-ordered remedy voids the contract and returns the involved parties to the positions they held before the contract, which may include refunding the investment.
- Punitive damages: When cases involve acts of malice or severe misconduct, the court may order punitive damages to punish the responsible party.
- Arbitration or mediation: You can also seek compensation through FINRA arbitration if your case involves securities brokers.
With deep roots in California, Cutter Law understands state laws and how the regulatory process can affect your case. We use this knowledge to help you determine the best path forward to recover damages.
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Sacramento, CA 95864
Contact an Investor Fraud Lawyer at Cutter Law Today
Family-owned, California-based, and client-focused, Cutter Law offers the compassionate support and fierce legal advocacy you want in an investor fraud attorney. Call (888)-285-3333 or contact us online today for a free consultation or legal strategy session. We have three convenient offices in Sacramento, Oakland, and Santa Rosa.
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Key Takeaways Examples of deceptive business practices in California include false advertising, hidden fees, and bait-and-switch tactics. California has strict
The California Whistleblower Protection Act provides state employees with guidance and protections for reporting violations of the California False Claims Act.
The California False Claims Act (CFCA) makes it a crime to make false statements when charging the state for goods or services.
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