Wisconsin Securities Fraud Lawyer
Wisconsin securities fraud lawyers represent investors who lost money due to securities fraud. Federal and state securities laws prohibit misconduct in the sales of securities but do not ensure recovery in cases of broker fraud or misconduct. If a brokerage firm or stock broker encouraged you to purchase overly risky securities, you may have a case for a Wisconsin investment fraud lawyer.
Wisconsin Investor Protections
In Wisconsin, the Department of Financial Institutions (DFI) oversees the registration of securities as well as investment professionals. Securities are financial instruments that allow investors to earn a return on their investment, based solely on the efforts of others. The Securities Act of 1933 prohibits the use of fraud or deception in the sale of securities.
State laws, also known as Blue Sky Laws, typically expand on and reinforce federal securities laws. Chapter 551.501 of the Wisconsin State Statutes addresses securities fraud, stating the following:
“It is unlawful for a person, in connection with the offer, sale, or purchase of a security, directly or indirectly, to do any of the following:
- To employ a device, scheme, or artifice to defraud,
- To make an untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading,
- To engage in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person.
Securities are required to register with both the Securities and Exchange Commission and the state of Wisconsin unless they are specifically exempted or are federal covered securities, e.g., securities issued by a company registered under the Investment Company Act of 1940.
DFI promotes investor education with their Wisconsin Investor Guide which offers “strategies for investing wisely and avoiding financial fraud.”
Wisconsin Penalties for Investor Fraud
There are both civil and criminal penalties for investor fraud.
- Violations of Chapter 551 are classified as a Class H felony. There are enhancements for penalties if the victim of securities fraud is 65 or over.
- DFI imposes regulatory fines and may revoke or suspend a financial representative’s license.
Wisconsin securities fraud lawyers deal only with civil cases. There may be parallel criminal charges brought by the attorney general.
How Can I Recover My Losses?
State regulatory actions and criminal prosecutions may not necessarily recover an investor’s losses.
In order to recover, investors may want to consult a Wisconsin securities attorney before filing a Statement of Claim for FINRA arbitration. Most investment contracts include a pre-dispute arbitration clause that requires investors to resolve their disputes using the FINRA arbitration process rather than a civil suit. Wisconsin investment fraud attorneys can walk you through the process of FINRA hearings and answer any questions you may have before filing.
What Types of Cases Do Wisconsin Investment Fraud Attorneys Take?
Below are some of the most common examples of securities fraud in FINRA arbitration cases. If you believe you may have a case for FINRA arbitration but are not sure if you have experienced securities fraud, contact a Wisconsin securities fraud lawyer at Kurta Law. Our attorneys will evaluate your case for free.
Unauthorized Transactions. Brokers are not to execute unauthorized transactions. For brokers to exercise discretion, the investment account must have been approved for discretion by both the investor and the brokerage firm.
Unsuitable Investments. Investors who rely on brokers for recommendations should be able to trust that their broker will take their risk tolerance into account. If a broker ignores their investor’s need for conservative, income-producing investments and instead chooses risky alternative investments, variable insurance products, or private placements, the investor may have a case for a Wisconsin securities fraud attorney.
Excessive Trading: Also known as churning or commission abuse, excessive trading occurs when the broker executes so many transactions that the per-transaction fees make it unlikely for the portfolio to generate a return.
Mutual Fund Fraud: Brokers are required to inform their investors if they are entitled to discounts on purchases of mutual fund shares.
Elder Financial Abuse. The elderly are unfortunately more likely to become victims of securities fraud. Red flags of elder financial abuse include becoming an elderly investor’s beneficiary, requesting a loan, or opening a joint account.
How Can I Recover from Investment Fraud in Wisconsin?
Consult with a Wisconsin investment fraud lawyer at Kurta Law if you have questions. Our attorneys only collect a fee if we win a settlement or an arbitration award. Call (877) 600-0098 or email info@kurtalawfirm.com for a consultation today.