Securities Fraud Our Litigators Handle Cases of Securities Fraud

Texas Securities Fraud Lawyer

Securities fraud occurs when an investor is enticed to make a purchase or sale decision on the basis of false information, often resulting in financial losses. Securities laws prohibit operators in the stock and commodity markets from misleading investors to part with their money based on false statements. When they do, they are breaking the law and a, attorney can hold them accountable for their actions and for investor losses that resulted from their fraud.

We can help victims of securities and investment fraud recover damages from those responsible for their losses. By their nature, securities fraud cases can be very complex. Recovery of assets from the proceeds of securities fraud is a resource intensive and expensive undertaking because of the cleverness of fraudsters in the concealment of assets and money laundering. A securities lawyer can bring the expertise and resources necessary to build a strong case.

Types of Securities Fraud

The securities attorneys at Arnold & Itkin LLP represent clients in issues related to the following:

  • Investment Fraud
    Investment fraud occurs when investors are enticed to invest in a security based on false or misleading statements. Recent examples include the fraudulent representation of some mutual funds as conservative investments despite the fact they were heavily invested in risky sub-prime mortgages of dubious value.

  • Stock Fraud
    Stock fraud occurs when corporations prioritize profits over shareholder interests. Illegal insider trading, another form of fraud, is the trading of a corporation's stock or other security by corporate insiders based on material non-public information obtained during the performance of the insider's duties or misappropriated.

  • Stockbroker Fraud
    Stockbroker fraud occurs when a broker recklessly disregards the investment objectives and risk tolerance of his or her client and engages in behavior that violates the stockbroker's professional duties.

  • Mortgage Backed Securities Fraud
    Undisclosed risks associated with mortgage backed securities with ties to risky subprime mortgages have cost investors more than $1 billion as those securities lost value and became illiquid.

  • Ponzi Scheme
    A Ponzi scheme is an illegal investment campaign in which a person seeks ways to illegally create revenue for themselves. They are generally made by fabricating an investment plan and marketing it to naïve investors.

Arbitration or Litigation?

Securities arbitration is the usual method of resolving securities-related disputes between brokerage firms and their customers. In the United States, securities arbitration is the preferred method of resolving disputes between brokerage firms, and between firms and their customers. The securities industry uses a pre-dispute arbitration agreement, where the parties agree to arbitrate their disputes before any such dispute arises.

A pre-dispute arbitration agreement is included in virtually all Customer Agreement forms used when opening a new account. Because it may be buried in fine print and is, regardless, a requirement to open an account, customers may not realize they are waiving rights to litigate and agreeing in advance to arbitration. Even so, those agreements were upheld by the United States Supreme Court in Shearson v. MacMahon, 482 U.S. 220 (1987) and today nearly all disputes involving brokerage firms are resolved in securities arbitration.

Securities arbitrations are held primarily by the Financial Industry Regulatory Authority (FINRA).

Because brokerage firms and brokers are members of NASD and various securities exchanges, they are obligated by the rules to those organizations to submit to arbitration of customer disputes at the demand of the customer. Consequently, the majority of disputes between stockbrokers and their customers are resolved in arbitration.

Contact a Houston Securities Attorney

If you have incurred substantial financial losses in connection with fraudulent acts or advice of a financial planner or advisor, stockbroker, investment advisor, or corporation, our attorneys may be able to help you claim compensation for your losses. You should contact an experienced securities attorney to learn more about your options.

Contact a Houston, TX securities fraud lawyer from our office today to discuss your case.

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