What Is Affinity Fraud and How Can It Lead To Investor Losses?
Getting a recommendation to work with a financial advisor from someone you know, especially if the latter and others in your community are also working with that registered broker or investment advisor, is one of the reasons that investors end up deciding to sign with a particular broker-dealer or RIA. If that financial professional is experienced and does a good job of protecting and growing your assets, then you are all set. However, should you end up working with someone unscrupulous, a type of broker misconduct involving what is known as affinity fraud can happen.
Affinity fraud is the term given to when a scammer targets members of an identifiable group. The fraudster might be part of the group (or perhaps even pretend to be a member) and/or share a cultural or ethnic affinity. Affinity fraud takes advantage of the trust and relationships within these groups. Not only that but because of said relationships, victims of affinity fraud may be reluctant to report any suspected financial exploitation.
Sometimes the perpetrator of an affinity scam is a friend or acquaintance. When they also happen to be a stockbroker or investment adviser, this only gives them added credibility to commit their scheme.
How Can Our Broker Fraud Attorneys Help If You Suffered Affinity Fraud Investor Losses?
Shepherd Smith Edwards and Kantas (investorlawyers.com) represent those who have been the victims not just of broker misconduct but also of affinity fraud by financial professionals. We help investors in recouping their losses from brokerage firms that neglected to properly supervise these registered representatives or failed to identify and stop investment fraud.
Perhaps one of the most infamous schemes involving affinity fraud is the Madoff Ponzi Scam. Celebrities, other famous people, wealthy investors, retirees, mom-and-pop businesses, institutional investors, and many others suffered significant investment losses in this up to $65B scheme that bilked thousands. Many investors knew each other and referred Bernie Madoff to their friends and family.
In another more recent example, our experienced affinity fraud securities lawyers are currently representing a number of investors against Emerson Equity and its broker Tony Barouti. He is accused of using his shared cultural affinity to allegedly persuade investors of Persian descent to invest in GWG Holdings L Bonds. GWG filed for bankruptcy in 2022. Already, more than two dozen investors have filed broker fraud lawsuits against Emerson related to Barouti.
If you suspect that you were the victim of affinity fraud, contact us today for your free, no-obligation case assessment. If we determine you do have grounds for an investor loss claim, and we agree to work together, we can help you sue your broker-dealer and fight for your financial recovery.
Over the years, we have helped thousands of clients, including retail customers, retirees, senior investors, institutional investors, high-net-worth investors, and others to pursue damages from brokerage firms and registered investment advisors (RIAs). While we cannot guarantee any results, more than 90% of investors we have worked with have received full or partial financial recovery.
Call (800) 259-9010 today.