New SEC Ruling Likely to Increase Stock Fraud

By Top Class Actions | November 16, 2012

Category: Stocks & Securities Class Action Lawsuits

By John Curran

SEC fraud lawsuit attorney Congress passed a law in April that will require the SEC to open up advertising to a new group of investment service providers. However, even the agency’s own employees are worried about the risks that private investors may have to take if groups like hedge funds and other private equity interests are allowed to solicit the general public.

There are some restrictions in place that could limit the risk of investors having to deal with stock fraud. For example, a person’s net worth would have to be in excess of $1 million, or their annual income more than $200,000. Unfortunately, there is a difference between financial acumen and investing acumen, as many stock fraud lawsuit lawyers would note. More importantly, the investment vehicles used by hedge fund managers and private equity firms differ from those used by mutual funds and other less closely-held institutions.

Many of these entities use a variety of tools to ensure the maximum return on investment for their clients. Unfortunately, it may be difficult for the layperson to know whether or not trading on margin, short selling, options trading or any number of other tactics are merely masking what could be securities fraud. In addition, the reporting requirements for these types of small financial services companies differ from those of larger firms like Vanguard or Ameritrade.

However, there are many potential benefits that could outweigh the risk of stock fraud. One is that in addition to hedge funds, many early-stage startups could benefit from learning about Angel investors and similar people that help small businesses grow.

It becomes a double-edged sword, securities fraud lawsuit attorneys will point out. For people that need investments this could represent a real opportunity, and one that could help the American economy where jobs are gained mostly to small businesses. However for those who invest, a lack of understanding about the tactics of these companies could leave open the risk of securities fraud.

However, if you have had to deal with the loss of income or seen a hit to your retirement fund from any firm, get educated. Visit our Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation now and fill out the short form there for a legal review of your potential case. An experienced securities fraud lawsuit lawyer will help you understand what legal options are available to you.

Pursuing a legal claim could get you your money back as well as damages if you succeed. Find out when you contact a securities fraud lawsuit lawyer now.