With the ongoing financial downturn nabbing the headlines daily, it is no surprise that the country - Fort Lauderdale included - has latched on to a villain in this crisis: Bernard Madoff. The allegations against Madoff are truly remarkable - the stuff of legend - and the lengths of the apparent disregard and decpetion is perhaps unprecedented. It is somehow easier with a person, a face, to lock onto in dealing with the ongoing anxiety and upset of these times. In seeing Madoff splashed across the front page, we feel we can say, “Here is the face of securities fraud.” And it is true. Perhaps what is most striking is the simplicity of the fundamental fraud: though the numbers are large and the jargon thick, Madoff himself has admitted that his crime is basically a Ponzi scheme.
In recent years, things in the financial sector seem to move in a big way or not at all. So, Madoff is the type of story that we have come to identify as securities fraud. Perhaps we can sketch out a description: Financial losses in the millions or billions. Huge companies rotting from the inside out with corruption. World-renown financial figures/celebraties folding beneath their own greed. Above all, it is remarkable, sensational, and spectacular.
However, it is not a legal requirement that securities fraud meet these superlatives. Fraudulence comes in all shapes and sizes, all of it illegal, whatever the fall out. The average investor would never know it by reading the papers, but far more common than the towering schemes of the front page are small-time frauds, cheating the small-scale investor. It takes only one bad broker to ruin the lives of many investors. And sadly, these smaller cases can seem even more serious. Though Madoff is no doubt on track for dire legal straights, his financial ability to post a $10 million dollar bond to stay out of jail instantly puts his situation far apart from a middle-class couple, losing their nest egg to a predatory or otherwise incompetent small-time broker. The crime is the same, it is only scale that is different.
Some have suggested that the sheer attention and newsworthiness of the large-scale, catastrophic fraud cases of recent memory render the average investor that much more vulnerable. When we begin to identify financial fraudulence as a phenomenon that strikes rich people, on a large scale, we blind ourselves to any other kind of deception, even one staring us in the face. Here are some tips from the SEC to help with safe investing.
Pose questions, follow up on answers. For centuries, con men (and women) of all variety have relied on one universal truth: most individuals do not do their homework before investing.
Investigate the company before you invest. Take the time to do as much research as necessary until you are sure that you have a strong grasp of the nature of the business, the products, and the services of any company you are considering investing in. Verify this information from several sources.
Consider the source. Investigate the salesperson. Professional con people can easily gain the trust of nearly anyone. Investigate the salesperson championing the investment/opportunity. This step should be taken irregardless of any already-established, (perhaps social) relationship.
Be especially dilligent with unsolicited offers. E-mail is free, easily accessed, and difficult to trace. Are these qualities that create confidence in using e-mail information for investing your money? Compile your own research, independently, and be extra careful should you learn of a tip through e-mail, fax, or online.
Under the best circumstances, with the best precautions, it is still possible to be duped. Immediately report an incidents or suspect incidents and seek the legal counsel of an experienced Fort Lauderdale securities fraud attorney: this is what distinguishes good investing from bad.
If you or a loved one is in need of legal assistance, call Fenster Cohen & Sobol, (954) 845-8989, (561) 737-7789 or (877) 845-8989 or submit an online questionnaire. The initial consultation is free of charge, and if we agree to handle your case, we will work on a contingency fee basis, which means we get paid for our services only if there is a monetary recovery of funds. In many cases, a lawsuit must be filed before an applicable expiration date, known as a statute of limitations. Please call right away to ensure that you do not waive your right to possible compensation.