Not every investment loss is actionable. This is so even if the disappointed investor relied upon the advice or recommendations of a broker, or other professionally qualified person. The following definitions and explanations may help you determine whether you need professional advice and whether you just might have a case.
Disputes over investment losses are sometimes referred to as "securities fraud" cases. They are subject to and controlled by a vast body of state and federal laws, including laws relating to contracts, conversion, fiduciary duty, unfair business practices and, most especially, "securities" and "fraud."
What are Securities?
"Securities" are legally defined in very broad and flexible terms. They can include virtually any thing, instrument or interest that might be sold as an investment. The tests to determine whether a particular investment is a security have included the finding of: 1) the existence of a common enterprise; 2) the purpose of the seller being to raise money; 3) the purpose of the buyer being to generate a profit; and 4) an investment the profits of which are to come solely from the efforts of others.
What is Fraud?
"Fraud" can consist of any device or scheme designed to deceive; promises made with no intention to perform; the misrepresentation of material facts; and the non-disclosure of material facts. Under the securities laws, such non-disclosure is statutorily defined as being the omission "to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading." (15 U.S.C. Section 78j(b))
Liability
Liability for securities fraud may arise from a number of sources, including but not limited to: advertising and promotional materials; registration statements, documents and information filed with the SEC; published or offered opinions of professional accountants, attorneys and financial advisors; oral and written communications; and promotions and offers for sale.
Perpetrators
Perpetrators of actionable securities fraud come in all shapes and sizes, and include those who are or appear to be real estate developers, scientists and inventors, and account representatives (commonly referred to as "stock brokers") in the most reputable of stock brokerage firms.
Key Questions
If you have suffered an investment loss, ask yourself the following two questions:
- In making the investment, was I induced by, or did I rely upon, anything which I now believe to have been untrue or misleading?
- Was the loss significant enough to warrant the expenditure of some of my time and money to recover it?
If the answers to both of these questions are, "Yes," contact the securities fraud offices of Virginia H. Gaburo & Associates to review your legal options.
For more information about securities law, visit the following Practice Information Pages on this website:
