Like all securities fraud, mutual fund fraud is governed by both state and federal laws, as well as professional rules and guidelines set forth by the NYSE and the FINRA (formerly NASD), as well as by common law standards establishing a minimum duty of care that professionals owe their clients.
What is Mutual Fund Fraud?
Mutual fund fraud occurs when a stockbroker or investment adviser buys or sells mutual funds for a client by misrepresenting the nature of the risks or recommending investments that are inappropriate to the client’s risk tolerance levels and investment goals.
Specific cases of mutual fund fraud may involve various different types of fraudulent behavior such as:
- Churning (also known formely as Excessive Trading)
- Making unsuitable recommendations
- Unauthorized switching (a type of unauthorized transaction)
How to Spot Mutual Fund Fraud
Some common indicators of mutual fund fraud include:
- Excessive charges accrued to your mutual fund account that are not offset sufficiently by your profits.
- Unauthorized changes to your mutual funds.
- Unusually concentrated or volatile mutual fund investments that your broker has recommended.
If you have noticed these or other signs indicating your stockbroker may be engaging in mutual fund fraud, it is important that you seek advice quickly. Any losses you have already incurred may continue to adversely affect your investment portfolio, so it is in your best interests to resolve these issues promptly and recover any losses as soon as possible.
Trust Our Mutual Fund Fraud Lawyers
To learn more about the types of mutual fund fraud and determine whether you have a claim, call or email one of our mutual fund fraud lawyers today. We’ll help you establish whether you have been a victim of mutual fund fraud, and if so, we’ll fight to get your money back.