The owner of a rare coin business in Salt Lake City, Utah, has recently been hailed into court by the Securities and Exchange Commission, the U.S. Futures Trading Commission and the Utah Division of Securities for a precious metals Ponzi scheme that defrauded over 200 investors in sixteen different states. The scheme defrauded investors over $170 million since 2013.
A fiduciary duty is one of the highest duties known to law. The person bestowed with this duty holds another’s confidence and trust. Attorneys, brokers and financial advisors all have similar obligations. They owe their customers loyalty, care and good faith. Breach of fiduciary duty could result in financial disaster for the client.
When financial professionals are unethical, they will be made to pay, as evidenced by a recent settlement between Visium Asset Management and the U.S. Securities and Exchange Commission (SEC). In early May, the hedge fund was ordered to pay $10 million for insider trading.
Every investor should know about pump and dump and churning. While their tactics and actions are different, they are both types of investment fraud that can wreak havoc on your investment goals. Their dynamic names to describe fraudulent tactics are quite apt.
Pump and Dump
Investment fraud is nothing new, and unfortunately, it is something American's read about in newspapers and on the web nearly every day. Sadly, many brokerage firms and financial advisors will stop at nothing to make a few extra bucks at the expense of unsuspecting investors, and senior citizens, who are some of our most vulnerable members of society, are often the main target for multiple types of investment fraud.
The attorneys at Block & Landsman actively represent individuals and employers who are either contemplating or challenging restrictive covenants, including non-compete and non-solicitation terms in an employment agreement or contract. Recent case law highlights the difficulties in drafting effective and enforceable covenants.
When a consumer signs a contract that includes a pre-dispute arbitration clause, they forfeit their legal right to file an individual or class-action lawsuit against the other party. These clauses require consumers to let arbitrators, rather than judges or juries, settle disputes that range from financial fraud to wrongful death. However, federal authorities continue to question the fairness of mandatory arbitration, and a new report reveals its effect on consumers who use financial services.
In recent years, the cases involving Bernard Madoff and other similar scam artists have made Ponzi schemes headlines in recent years. In March of 2009, Madoff pled guilty in federal court for running a massive Ponzi scheme that is said to be by far the largest fraud of this type in U.S. history, possibly involving more than $64 billion. Each year, Ponzi schemes cause thousands of unsuspecting investors financial devastation.