Call Now For a Free Consultation:
(614) 502-6165

Fact Vs. Fiction: Who’s Really at Risk of Becoming a Victim of Investment Fraud?

Fiction:

Well-educated professionals with financial experience don't get scammed.

Fact:

Nearly 2/3 of investment fraud victims are college-educated, self-reliant individuals with higher-than-average incomes and levels of financial literacy.*

Research conducted by FINRA, AARP, and others has illuminated several key differences between investors who become victims of fraud and those who don't. Importantly, victims of financial fraud have more self-confidence in their financial knowledge than non-victims and are more likely to invest in new ideas and own high-risk investments.

Additionally, according to SaveandInvest.org, approximately 70% of known investment fraud victims have purchased investments based on a friend, family member, or colleague's recommendation. That's about twice the percentage of non-victims.

FINRA Foundation president John Gannon is quotes as saying: "Many investment fraud victims are professionals. They're doctors, lawyers, stockbrokers, businessmen. In fact, the typical investment fraud victim is a well-educated male between the ages of 55 and 65."

Robert Cialdini, a psychologist at Arizona State University and an expert on the psychology of persuasion and influence, may be able to shed some light on why well-educated professionals are at higher risk for investment fraud. In the article, he says: "If you think you're invulnerable..., your defenses come down.... So those individuals who have the background and experience, who think they know what constitutes a trick and what doesn't, then open themselves up to the possibility of being tricked because they're sure that they can spot it and resist it. Oftentimes they are wrong."

Research shows that conducting thorough research, staying on guard, and carefully monitoring your investments can help protect you from investment fraud.

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 .

Share This Story
If you found the information provided by this article useful, consider sharing to your social media channels to help others in their search for reliable resources.
Consult with Our Legal Team
There is never a cost associated with a consultation
Columbus Office

614-224-6000
305 W. Nationwide Blvd
Columbus, OH 43215
Meyer Wilson
New Orleans Office

900 Camp Street 
Suite 337
New Orleans, LA 70130
Los Angeles Office

310-905-8688
2029 Century Park East,
Suite 400N
Los Angeles, CA 90067
Cleveland Office

216-600-1355
4781 Richmond Rd.
Suite 400
Warrensville Heights, OH 44128
Bloomfield Hills Office

248-817-8214
41000 Woodward Ave.,
Suite 350
Bloomfield Hills, MI 48304
Quick Links
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. No recipients of content from this site, clients or otherwise, should act or refrain from acting on the basis of any content included in the site without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from an attorney licensed in the recipient's state. Read More
The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter.
Read More
chevron-down linkedin facebook pinterest youtube rss twitter instagram facebook-blank rss-blank linkedin-blank pinterest youtube twitter instagram