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Red Flags to Look Out for From Your Financial Professional

The Financial Industry Regulatory Authority (FINRA) recently released an investor alert about behaviors potentially fraudulent financial professionals often engage in. It’s important to keep a close eye on your investments no matter how much you trust your broker, and remaining vigilant throughout the course of your professional relationship can make the difference in spotting fraud before it has serious financial implications. Some behaviors FINRA highlighted include:

  • Asking You to Write a Check to Someone or Something Other Than the Broker’s Firm: All deposits should be made directly to the firm itself, and you should immediately be wary any time your financial advisor pitches you an investment opportunity that requires you to write a check to either them or to a third party.
  • Using Personal Email Accounts For Communication: Among the many ways FINRA protects investors is by requiring registered firms to maintain and preserve communication records between their members and investors. This documentation helps regulators and firms ensure that recommendations you receive are appropriate, and that your broker isn’t making false claims.
  • Selling Promissory Notes: Promissory notes, while sometimes are legitimate forms of investment, more often are fraudulent and used as part of scams. These notes are primarily offered to accredited and corporate investors – unless you fall in one of those categories, you should proceed with caution.
  • Asking for Personal Loans: Brokers are prohibited by FINRA to borrow money from their clients. If your broker asks you for a loan, you should contact their supervisor immediately.

If you lost money due to the negligent or wrongful actions of your financial professional, our investment fraud lawyers at Meyer Wilson are ready to provide you with the legal assistance you require. Call us at one of our offices located across the United States today, or fill out our online form to schedule a free case consultation 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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