SEC Investor Alert

Posted on October 14th, 2016 at 9:08 AM
SEC Investor Alert

From the Desk of Jim Eccleston at Eccleston Law LLC:

The SEC's Office of Investor Education and Advocacy has recently issued a warning to investors  who receive lump sum payments from insurance companies following the recent damage from Hurricane Matthew. The SEC’s goal in alerting potential investors was to warn and educate them because hurricanes, floods, oil spills, and other disasters often give rise to investment scams.

Examples of common natural disaster insurance fraud include trading programs that falsely guarantee high returns, classic Ponzi schemes where new investors' money is used to pay money promised to earlier investors, and pump-and-dump scams where fraudsters use fake "news" to pump up the stock price of small companies so they can sell shares they own at artificially high prices.  

The SEC also recommended the best ways to avoid being defrauded. These recommendations included having investors ask questions about their investments, check the registration status and background of anyone recommending or selling an investment using the SEC’s Investment Adviser Public Disclosure (IAPD) database, and contacting state securities regulators for more information.

In sum, it is imperative that investors in natural disaster insurance safeguard investments that promise fast and high profits with little or no risk because they are classic signs of fraud. 

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. The securities lawyers at Eccleston Law also practice a variety of other areas of securities for financial advisors including breakaway broker servicesemployment mattersstrategic consulting and counselingbroker litigation and arbitration,whistleblower actions, and much more. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.  

 

Related Attorneys: James J. Eccleston

Tags: Eccleston, Eccleston Law, James Eccleston, Eccleston Law LLC, SEC, Investor Education and Advocacy, investors, lump sum, Ponzi scheme, Investment Adviser Public Disclosure, IAPD, fraud

Return to Archive

TESTIMONIALS

Previous
Next

I just wanted to say thanks again for preparing and executing my case in such a professional manner. It was a pleasure to watch two professionals take such pride in their work, as well as becoming personally in tune with your client (Me). I would personally recommend you and your firm to anyone.

John O.

LATEST NEWS AND ARTICLES

October 26, 2021
Former Advisor Fails To Reverse Bar After Alleged $1 Million Theft From RBC

A former RBC Wealth Management advisor lost his bid to reverse an industry bar, according to an appellate decision issued by the Financial Industry Regulatory Authority (FINRA).

October 25, 2021
Firms Walk Thin Regulatory Line In Referring Self-Directed Clients To Advisors

While online trading platforms have surged in popularity during the pandemic, brokerage firms view self-directed investors as a source of new clients.

October 22, 2021
TIAA Sues Former Advisors For Allegedly Soliciting Clients

Teachers Insurance and Annuity Association of America (TIAA) filed suit against three of its former Connecticut advisors for allegedly soliciting TIAA clients to join them at their new firm.