Manipulating financial markets by committing fraud poses a serious threat to investors. Those affected by this type of fraud could experience devastating financial losses and depreciated business values. In addition, there is the expense of paying for any necessary investigative services.

Financial fraud comes in many different forms. The Federal Bureau of Investigation (FBI) stated that there is an increasing number of new, fraudulent types of financial misconduct developing each year.
This is partially due to the emergence of new technologies. Very often, those committing financial fraud to leverage innovative means of doing so without being detected.

Our commercial litigation attorneys know that the outcome for victims of investment fraud is almost always devastating. This is the case regardless of the type of scheme involved.

However, while the initial impact on one’s finances, if they are the victim of investment fraud, may be significant, it’s often possible to remedy the situation with the help of an experienced investment fraud lawyer. Each investment fraud attorney at our firm has pursued individual claims as well as class-action lawsuits for financial fraud cases. As a result, the team at our nationwide investment fraud law firm is uniquely qualified to serve the needs of those who believe they have been the victims of investment fraud.


Whether you are investing in a college savings plan, pension fund, retirement account, private company, financial institution or commodities, you may be at risk of suffering from the effects of financial fraud. According to the FBI, common securities and commodities schemes include:

  • Investment Fraud: This category of financial misconduct involves the sale or supposed sale of financial instruments. This means any type of tradable asset or contractual right to gain/give money. Typical investments that may be fraudulent often present would-be victims with low to no-risk investment opportunities, guaranteeing that the investor will gain returns that may be overly consistent, have complex strategies in their investment plans or have unregistered securities. Professional and private investors, hedge fund managers, and others who you consult with about your investments could be perpetrating investment fraud. There are several types of investment fraud, such as:
  • Ponzi Schemes
  • Affinity Fraud
  • Pyramid Schemes
  • Prime Bank Investment Fraud
  • Advance Fee Fraud
  • Commodities Fraud
  • Market Manipulation
  • When the price of shares artificially inflates due to false or deceptive sales practices, investors may become victims of market manipulation. There are various ways fraudsters may cause the price of a company’s shares to rise in a way that does not reflect the company’s genuine value.
  • For example, a fraudster may release false information to the public that generates unearned enthusiasm for an investment opportunity. This financial scheme is often referred to as a “pump and dump.” Those committing this type of fraud typically have shares in the company. They artificially inflate the price of their shares, generating interest and attracting investors who believe the stock is rising for legitimate reasons. Then, the fraudsters dump their shares before the price returns to where it should be.
  • While those who perpetrate the fraud acquire illicit gains through this misconduct, shareholders suffer financial losses. After the fraudsters dump their shares, the price of shares usually plummets fast, leaving those who bought shares when the stock was rising with investments that are worth much less than expected.
  • Broker Embezzlement: If brokers directly steal from their clients by doctoring or forging documents, transferring or trading without authority to do so, or otherwise breaching their fiduciary responsibility, their clients may be the victims of broker embezzlement. Cases of broker embezzlement may sometimes be difficult for victims to detect, as they often involve a broker using assets they obtained legally in a manner that they were not intended to be used. Someone unsure of whether they have been the victim of broker embezzlement fraud should meet with an investment fraud lawyer to learn more about their case.
  • Late-Day Trading: Financial fraud often involves the sale or purchase of securities after the regular trading market has closed for the day. These after-hour actions can allow traders to illegally benefit from the closing price of stocks as well as gain knowledge about upcoming market changes. As a result, they have an unfair advantage that can allow them to earn more while causing others to potentially suffer losses


Being the victim of investment fraud can be a very painful experience. However, the odds of being a victim are much lower than they would otherwise be if you know how to spot signs indicating someone may be committing a form of investment fraud. Signs to be on the lookout for include the following:

⦁ Claims that an investment has virtually no risk attached to it
⦁ Refusal to thoroughly or clearly answer questions about an investment opportunity
⦁ High-pressure sales tactics, such as suggesting you have a very limited amount of time to take advantage of a once-in-a-lifetime opportunity
⦁ Claims that someone has insider knowledge of an investment opportunity and that you should act on it before this knowledge becomes more widespread

It can be very tempting to jump into action when presented with an alleged opportunity to make a lot of money easily with an investment. However, it’s always important to research investment opportunities thoroughly and monitor sales tactics for signs of a fraudster. An opportunity that sounds too good to be true often isn’t.


The commercial litigation attorneys at the law firm of Colson Hicks Eidson represented a wide variety of clients, from Fortune 500 companies to minority shareholders, in legal actions against those responsible for fraudulent financial losses.

There is a marked difference between making a poor investment and being the victim of investment fraud. Do you think you or your company were the victims of one of the many types of securities and commodities fraud? Our law firm provides confidential consultation to discuss your potential financial misconduct claim. Contact us today.


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