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Financial Fraud Is on the Rise According to Officials, Scamming Billions of Dollars From Investors

It’s been nearly a decade since the $65 billion Ponzi scheme orchestrated by Bernard Madoff, and while there was a temporary dip in the number of similar schemes in the wake of that massive theft, securities officials are reporting that scams are on the rise again.

The biggest case in recent years by far is the $1.2 billion Ponzi scheme operated by the Woodbridge Group of Companies, but it’s not the only one. 1st Global Capital LLC and 1st West Capital LLC were the subject of an SEC investigation after warning signs indicated that the companies were involved in a $283 million loan fraud. Neither of these schemes come close to the financial damage that Madoff’s scheme caused, but they’re part of a much larger issue facing the investment world – more of these types of schemes are popping up seemingly every day. And, a considerable number of the people attempting to take advantage of their marks are unregistered and unlicensed in the securities industry, a change from recent trends.

"The surge in cases against unregistered actors reversed a two-year trend in which registered individuals and firms in the securities industry, broker-dealers and investment advisers, had constituted the majority of respondents in state enforcement actions," according to the North American Securities Administrators Association (NASAA).

NASAA reported that 647 of the cases in 2017 involved registered brokers, a nine percent spike from 2016, while 675 cases in that year involved unregistered individuals, a 24 percent spike from the year before. On top of that, some officials are seeing another worrying trend among scammers.

"A lot of the scamsters are getting a lot smarter," said Joe Borg, director, Alabama Securities Commission. "For example, if you asked me 10 years ago, do you have a problem with lawyers, I would have said no. Now, there are a slew of cases where lawyers are roped in by the crooks. They recruit the attorney to open an LLC or create an operating agreement."

This dramatic increase in the number of reported cases of fraud is a worrying issue, and our investment fraud lawyers at Meyer Wilson are currently investigating a number of brokers and individuals accused of fraudulent actions. If you were the victim of an investment scam or fraud, contact us today by filling out our online form, or call us at (614) 532-4576 to discuss your legal options with a member of our firm.

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The information contained in The Firm’s posts on its blog, fraud alerts, investigations or elsewhere on the site is based upon information obtained from other sources including, but not limited to, news outlets and federal, state, and regulatory agency filings. All suspects and subjects of postings herein are presumed innocent until proven guilty in a court of law or administrative action and any and all crimes are alleged until a court or regulatory agency finds otherwise .

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