What Did Your Brokerage Firm or Investment Adviser Do Wrong With GWG
Published On: April 3, 2021

Chicago-based Stoltmann Law Offices has represented investors who’ve suffered losses from fraudulent investments scams for over fifteen years.  Recently, common scams involve precious metals and the latest craze, cryptocurrency. When the price of any commodity goes up dramatically – from gold to digital cryptocurrencies – you can bank on the fact that scammers are pitching hard to lure investors into a trap. Many investments pitched on the internet fall into this murky pool.

The top threats to investors, not surprisingly, are Internet- and social-media based promotions, according to the North American Securities Administrators Association (NASAA), a securities regulator trade association. These frauds are often pitched to owners of self-directed Individual Retirement Accounts (IRAs), many of which are tied to brokerage services.

“Self-directed individual retirement accounts, which lack the services and protection of traditional IRAs, can be fertile soil for scammers, especially those involving cryptocurrency-related and precious metals-based investments,” Investment News reported.

What kinds of investments are being promoted? Start with gold, silver and platinum. Prices have risen over the past year due to economic anxieties, although precious metals prices are notoriously volatile. Also gaining outsized attention are cryptocurrencies such as Bitcoin, a digital currency that’s not backed by anything tangible. Other perennial scam investments include promissory notes, which offer unrealistic above-average yields, and foreign exchange vehicles in non-dollar denominated stocks and bonds. Many of these vehicles are being falsely pitched as sure routes to wealth. As with all get-rich-quick schemes, the promoters don’t reveal how much risk investors are taking or even if the investments are legitimate. What’s promoted is a way to reap high returns in a short period of time.

“We expect to see more complaints from investors who have been lured into schemes offering the promise of high returns in order to supplement lost income due to the pandemic,” said Illinois Secretary of Secretary Jesse White. White said investment offers that sound “too good to be true often share similar characteristics. The most common telltale sign of an investment scam is an offer of guaranteed high returns with no risk.”

The best way to short-circuit these online pitches is to ask if the promoter is registered with their state securities agency. You can also check their background record with state securities regulators to see if they’ve run afoul of the law. They also need to tell you the truth about the volatility and risk of the investments they are selling.

“The offer of securities by an individual without a valid securities license should be a red alert for investors,” NASAA warns. “Con artists also try to bypass stringent state registration requirements to pitch unregistered investments with a promise of “limited or no risk” and high returns.” Here’s a place to search the registration of your securities broker or financial adviser.

Have you invested with broker-advisers who have invested your money in internet-promoted investments or not honestly reported their risk or performance? FINRA and the SEC have strict rules on disclosing risk profiles on all investments sold by brokers and investment advisers. If they fail to fully inform you of downside risk, you may have a case in arbitration. Broker-advisers can be cited in investor arbitration claims if they don’t perform their duty to protect investors. Firms are also legally required by FINRA to monitor and supervise what their brokers are selling – their investments must be vetted and authorized by the firms – and have an obligation to investors to fully reveal true risk and return information about the vehicles sold. Investors can file FINRA arbitration complaints if these rules are broken.

If you invested with a broker-advisor and lost money as a result, you may have a claim to pursue through FINRA Arbitration. Please contact Stoltmann Law Offices, P.C. at 312-332-4200 for a free, no obligation consultation with a securities attorney. Stoltmann Law Offices is a contingency fee law firm which means we do not get paid until you do!


The posting on this site are mere OPINIONS and NOT statements of fact in any way whatsoever. The information should not be relied upon and there have been no findings made against the firms or individuals referenced on this site. In addition, this Blog is made available for educational purposes only and incorporates information from the web as well as to give you general information and a general understanding of the law, not to provide specific legal advice. By using this blog site you understand that there is no attorney client relationship between you and Stoltmann Law Offices (161 N Clark Street 16th Floor Chicago, IL 60601). The Blog opinions should not be used as a substitute for competent legal advice from a licensed professional attorney in your state.


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