Securities Fraud In San Francisco: How You Can Protect Yourself

Becoming the victim of securities fraud in San Francisco can lead to devastating financial losses and there are steps that you can take to prevent that from happening. Even if your broker is registered with a known brokerage firm, there are questions you should ask and due diligence you can do to protect yourself and your investments.

How To Protect Yourself Against Securities Fraud

Below, we discuss the steps you need to put in place to ensure that you are fully protected when dealing with a broker or brokerage firm based in San Francisco. 

1) Research Your Broker

Make sure they are, like they say, a registered representative with a broker-dealer and registered to trade securities in California. 

Look the broker up on to see if they have a past record of customer complaints alleging fraud or negligence or have been the subject of regulatory complaints. Some registered representatives have a slew of disputes following them from one brokerage firm to another, which leads to the question of why would a broker-dealer hire someone known for fraudulent behavior and entrust their customers to them?

2) Research The Investment That Is Being Recommended To You

Just because your broker or investment adviser suggests that you invest in a particular security doesn’t mean that you should. 

Look up the company that you are considering buying shares in or any other security, for that matter. This is regardless of whether it’s a bond, a real estate investment trust (REIT), a mutual fund, an exchange-traded fund (ETF), a structured note, or another kind of investment. 

Check out past financial statements and records for this security and watch out for any red flags indicating that this may be a Ponzi scam or some other illegitimate venture.

3) Make Sure You Understand The Investment And The Risks Involved

Ask a lot of questions until you fully understand the nature of the security you are investing in and what risks may be involved. This type of due diligence will allow you to make an educated decision as to whether the investment is suitable for your portfolio and your investment goals rather than merely saying yes while not really knowing what you’ve gotten yourself into.

4) Stay Away From Unsolicited Offers

Be very careful of investment offers that come to you via email, fax, or phone that you never asked for and that you can’t find any information about. When you decide to invest in a securities product, it is always important that you speak and meet with a registered financial advisor before investing your financial resources. 

5) Watch Out For Catchphrases Or Tactics That May Indicate Fraud

If the person trying to get you to invest pressures you into investing “right now or you may miss out,” that’s never a good sign, as are promises of “no or low risk” and “guaranteed returns.” Any legitimate investment has risk involved and the possibility there may be low or no returns.

6) Avoid Investments That Are Too High Risk For Your Portfolio

If you are a retiree, an inexperienced investor, or a conservative investor for whom too much risk could prove catastrophic, stay away from volatile or other risky investments that could cause you to sustain serious losses.  

San Francisco Broker Fraud Lawyers

Unfortunately, even investors who are careful can end up losing money because their financial adviser or broker engaged in misconduct or committed investment fraud. 

Many San Francisco investors have fallen victim to broker negligence, unsuitable investment recommendations, churning, overconcentration or made misrepresentations and omissions. When this happens, that investor may have grounds for pursuing a claim against the stockbroker and their broker-dealer that failed to properly supervise them.

At Shepherd Smith Edwards and Kantas, our San Francisco broker fraud lawyers can help you explore your legal options. We remain open for business and are available to meet with you via video and teleconference calls. Call us today on (415) 287-0877.

Contact Information