Fraud and Misappropriation

When a broker or advisor lies to obtain your money, takes it for themselves, or uses it in ways you never authorized, that is fraud or misappropriation — among the most serious forms of investor harm. If you believe your money was taken or misused, you may be able to recover it.

Deception Is Designed to Work

Fraud succeeds by looking trustworthy. Being deceived by a professional does not reflect poorly on you. The law places responsibility on the person who committed the fraud and, frequently, on the firm that failed to supervise them.

What Fraud and Misappropriation Can Involve

These claims cover a wide range of deception and theft, including:

• Taking or diverting your funds for the advisor’s own use
• Selling investments that do not exist or are not what they claimed
• Forging documents or signatures
• Making trades or moving money without authorization
• Hiding losses or fabricating account statements

Signs You May Have Been Defrauded

• Money or investments you cannot account for
• Statements that do not match what you were told
• Signatures or transactions you do not recognize
• An advisor who avoids your questions or pressures you to stay quiet
• A sudden inability to withdraw or locate your funds

Who May Be Held Accountable

Recovery may be possible from more than one source, including:

• The advisor who committed the fraud
• The brokerage firm that employed and was responsible for supervising them
• Others who substantially assisted the wrongdoing or ignored warning signs

Because the individual who committed fraud may no longer have the money, recovery often focuses on the firm that enabled or failed to prevent it.