You may think that you're too sophisticated to fall for the tactics of a fraudulent stockbroker, but if you are nearing retirement age, you need to be prepared for encounters with savvy scam artists, because you are their target population.
Research done within the last ten years by the Financial Industries Regulatory Authority (FINRA) revealed that the primary victims of fraud were actually much different than expected. Most victims were between the ages of 55 and 65. From the eyes of a fraudulent stockbroker, this population is ideal because of the wealth this age group has amassed over their working life. Men in this age group who were college-educated and had above-average income and above-average financial knowledge were frequent victims of fraud.
Victims also shared several personality traits:
• Self-reliant decision makers
• Optimistic outlooks
• Open to hearing sales pitches and about new opportunities
Open and optimistic people are more likely to give people a chance, a trait that scam artists take advantage of. Furthermore, while being a self-reliant decision maker can get you far in life, a fraudulent stockbroker can also take advantage of this trait. They anticipate that you will not seek outside opinions about your investment decisions and thus use your self-reliance against you.
Another common trait of fraud victims was a recent financial or health hardship, which might cause a victim to be more willing to take risks in order to regain a more solid financial foothold. While financial setbacks can be frustrating, you can't expect to quickly earn back money that took years to earn. Falling for a financial scam can cost you even more money.
The findings of the FINRA research make it clear that anyone, regardless of age or intelligence, could fall victim to investment fraud. Investors should always check to see if a broker is registered and check the validity of the proposed investment. You should never believe a stockbroker who says he or she doesn't need to be registered in order to do business with you. Even if a broker is registered, you should make sure that no complaints or regulatory action has been taken against them, which you can do using a free, online tool called BrokerCheck on the FINRA webpage.
If you have been the victim of investment fraud, you shouldn't feel alone. You should contact your state's securities regulator immediately to notify them of the fraudulent activity. Contact an attorney in your area who specializes in investment fraud and securities litigation. There may be other investors just like you who are looking to form a civil suit against a broker.
Patrick is a freelance copywriter with expertise covering various industries. This article aims to help people understand their legal options when it comes to consumer and how they can effectively navigate the system for obtaining compensation and justice. For securities and investment fraud attorney services, please visit http://www.stockbrokerattorney.com/
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