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If You Do These 4 Things, You’ll (Probably) Never Need to Hire an Investment Fraud Lawyer

The following is adapted from The Investor Protector.

I’ve been an investment fraud lawyer for over 20 years. In all that time, do you know what my biggest wish has always been? That one day, my job will be obsolete. Nobody will need to hire me, because nobody will be the victim of investment fraud.

While it doesn’t seem like that day is coming anytime soon, there are some things you can do to make sure you never need to hire me (or any investment fraud lawyer, for that matter). These simple steps are highly effective when it comes to protecting yourself from unscrupulous advisors. 

I’ve been doing this a long time, and in my estimation, if people consistently used the strategies I’m going to share with you, the number of cases I see would drop by more than 50 percent. You read that right: these easy strategies would protect more than half of the investors who find themselves swindled out of their life savings. 

So what do you say? Willing to take just a few minutes to protect yourself from bad advisors who would like nothing better than to steal your hard-earned money? Then what are we waiting for? Let’s dive in.

#1: Do Your Homework

The first step to protecting yourself from financial fraud is to research the broker and firm that you’re planning to work with. You can go to BrokerCheck and look up any broker by name or CRD number. In my opinion, this is a great first step when it comes to hiring a financial advisor, but unfortunately, it’s one that many people fail to do.

BrokerCheck—which is free to use—will show you the list of brokers that have been barred from practicing and tell you if your potential broker has any judgments or suits against them. You can also ensure they’re properly licensed, get information on a broker’s employment history, and much more.

The best part is you can do this research from the comfort of your couch. It only takes a few minutes, and it will give you quite a bit of information about the person you’re planning to hire.

If you see any red flags, obviously you should reconsider working with that particular broker. If you have specific questions about anything you see on BrokerCheck, you can contact the person’s supervisor to discuss it (or you can just move on to your next candidate).

#2: Meet Face-to-Face

After you’ve researched your potential advisor on BrokerCheck, the next step is to meet with the potential advisor face-to-face (or, if necessary, on Zoom or another virtual meeting platform). Why should you take the time to meet in-person?

It’s common for fraudulent advisors to represent themselves as part of a particular firm. By meeting with them in-person, you can get a feel for whether they’re telling you the truth or not. Do they have a legitimate office? Is there evidence that they’re with a real firm?

Before you hand over hundreds of thousands of dollars, make sure the story they’re giving you matches reality. With all the advisors out there, there’s no reason to invest with someone you can’t meet face-to-face, and you should go to them instead of having them come to your house.

If they’re reluctant to let you come to their office, or if anything about their workplace seems off, I strongly suggest you reconsider working with them.

#3: Ask Detailed Questions

Before you sign on to work with a broker, make sure you ask them some detailed questions. What licenses do they hold? Where are they licensed? How long have they been in business? Cross-check their answers with what you found in BrokerCheck to verify they’re telling you the truth. 

If everything checks out, then ask them for a few references. Make sure to follow up with the people they put you in touch with. Are they satisfied with the advisor? How long have they been working with them? Have they had any issues? 

Finally, do a Google search to look up the advisor you’re considering working with. Again, look for anything that seems off; remember, it’s better to avoid investment fraud altogether than find yourself in a situation where you potentially need to hire an investment fraud lawyer to help you recover money that’s been stolen from you.

#4: Choose Someone From a Large Firm

I know these tips are all about protecting yourself so you never need to hire an investment fraud lawyer. However, this last tip will help you protect yourself should something go terribly wrong. Make sure you work with an advisor who’s affiliated with a firm that has enough assets to pay out any claims in the event you do get defrauded. 

I just tried a case on behalf of a 74-year-old retiree widow who invested money with someone she and her late husband had known their entire lives. This person, who operates a tiny, one-person shop, defrauded her out of about 40 percent of her life savings. 

This advisor doesn’t have any money—they’re too small. So, even though I won the case, the chances of collecting everything owed to the widow is slim, because this one-person firm has such a minimal amount of assets.

To find out if a firm has sufficient assets to pay any judgments, talk to multiple people and do some digging online. Talk to different advisors, follow up with their references. By talking to different people, you’ll be able to gather as much information as possible so you can make an informed decision about whether this advisor and this firm are right for you.

Decrease Your Chances of Being a Victim

The best-case scenario is that you never need to seek counsel from an investment fraud attorney. To help decrease your chances of becoming a victim of investment fraud, make sure you arm yourself with as much information as possible before you hire an advisor. 

Obviously, there are no guarantees that you won’t get duped by an unscrupulous advisor. However, I can promise you that if you take the time to research your potential broker through BrokerCheck, meet with them in person, ask as many detailed questions as possible, talk to references, and make sure they’re with a large firm, you significantly increase your chances that you’ll never need to hire a lawyer like me.

For more advice on how to protect yourself from investment fraud, you can find The Investor Protector on Amazon.

David Meyer is the managing principal of Meyer Wilson, a national law firm he founded to represent investment fraud victims in their fight against deceptive brokers. Meyer Wilson is one of the nation’s leading investment fraud firms, recovering millions of dollars for clients throughout the last 20 years. David is currently the president of two bar associations: the Public Investors Advocate Bar Association and the Ohio Association for Justice. Included in The Best Lawyers in America®, David has also been twice named “Lawyer of the Year'' by the publication in his practice area and location. For more information about David’s investor claims law practice, visit investorclaims.com.