Category: Uncategorized

Messaging Apps Being Used in Pump and Dump Scheme

As technology continues to improve and new methods for communication become widespread, scammers will continue to find new ways to convince potential investors to invest in their fraudulent schemes. In this latest incident, perpetrators used the popular messaging platform WhatsApp to convince unwitting investors to purchase stock in Avra, a digital currency technology creator.

What is a “Pump and Dump” Scheme?

A “pump and dump” scheme is a form of stock fraud that involves artificially inflating the price of a stock by disseminating false information designed to lure investors into buying stock, which is usually priced quite low. A successful pump and dump occurs when unwitting investors purchase the stock, thus driving the price of the stock up. At some point after the stock has been artificially inflated, the perpetrators sell their stock at the inflated price for a profit and leave investors holding the bag.

The Recent “Pump and Dump” Scheme

In this instance, scammers used WhatsApp to convince users to buy Avra stock before dumping their shares at a higher price, according to FINRA. Some app users received messages purporting to come from employees of well-known brokerage firms stating that the stock price was going to “double in the next few days.”

The scammers in this case acted fairly quickly. On the morning of Aug. 21, the shares were sold for 17 cents at 10:20 a.m. By 11:00 a.m., the price jumped more than 500% percent to 94 cents per share. By 11:20 a.m., the shares dropped to 30 cents, indicating that the scammers sold their stake, flooded the market and drove the price back down, all within the span of one hour.

Call a Los Angeles Stockbroker Attorney Today

If you have received a similar message or purchased stock in what turned out to be a “pump and dump” scheme, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker lawyer today for a consultation regarding your rights.

 

Hiring the Right Los Angeles International Investment Attorney

Many individuals or a businesses located outside of the United States invest their money through bank or brokerage firm located in the United States or a U.S. division of a European or Latin American bank or brokerage firm. If you have lost money in such investments and believe you were misled or that your money was mishandled, you may wish to consult with a Los Angeles-based attorney who can advise you of your rights and the best way to handle your dispute with the bank or brokerage firm.

What Should You Consider When Consulting with or Hiring an Attorney

You should consider the following factors when consulting with or hiring an international investment attorney:

• Confidentiality – many investors from outside the United Stated choose to invest in the U.S. or through offshore entities in order to keep their financial affairs private and confidential. Make sure your attorney understands your need for confidentiality in order to protect you both personally and professionally.

• Communication – many U.S. attorneys are willing to travel to meet with you about your investment dispute. In addition, the use of e-mail, Skype, and quality long-distance phone service can make communicating with your U.S. attorney very easy.

• Effective Representation – if you have a problem with your investments or believe you are the victim of investment fraud you should look for a lawyer who has experience representing investors against banks and brokerage firms in both court and arbitration proceedings.

Call a Los Angeles International Investment Attorney Today

Make sure you have the confidence not only to invest safely in the U.S., but also to know that your assets are being protected. Contact an experienced Los Angeles international investment attorney today for a consultation regarding any investment problems that you have.

Investing in Regulation D Securities

The Securities and Exchange Commission requires most securities offered for sale to be registered with the SEC. Under Regulation D, however, certain exemptions allow for the sale of unregistered securities. These securities are also known as “private placements.”

What is the Purpose of Regulation D Securities?

Regulation D offerings are intended to provide small companies with access to capital markets. Those small companies sometimes cannot afford the costs and expenses necessary to meet the requirements of securities that are registered with the SEC. Many hedge funds also are private placements. It can be much more difficult to obtain detailed information about the finances of companies that issue private placement securities, as the reporting requirements are much lower than the requirements for registered securities.

Who Can Be Sold Regulation D Securities?

Regulation D offerings generally are more risky than registered securities because they do not involve the same level of reporting requirements that exist with registered securities. As a result, Regulation D securities can only be sold to accredited investors. An accredited investor must have an income of $200,000 or more annually or have a net worth in excess of $1 million. Regulators have determined that investors who meet these financial thresholds generally are more financially sophisticated and better able to understand and appreciate the risks of private placement securities.

What is the Responsibility of Your Broker or Brokerage Firm?

As with all securities recommendations, your broker must disclose both the benefits and risks of a private placement investment. And they are not permitted to recommend these risky investments to investors with conservative investment objectives. Many brokerage firms have sold private placements that later turned out to be fraudulent or part of a Ponzi scheme.

 Call a Los Angeles Stockbroker Attorney Today

If you invested in a Regulation D, private placement security and suffered an investment loss, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles stockbroker attorney today for a consultation to discuss your rights and obligations.

Investing in Structured Products

A structured product, known by names such as equity-linked note, market-linked note, or principal protection note, is a prepackaged investment based on derivatives. They can present themselves in several forms including a single security, multiple securities, commodities, options, options on hedge funds, and more.

What are Structured Products?

According to the SEC, structured products are “securities whose cash flow characteristics depend upon one or more indices or that have embedded forwards or options or securities” where “payment obligations are contingent upon changes in the value of underlying assets, indices, interest rates or cash flows.”

What Do Structured Products Have to Offer?

Structured products offer an alternative to traditional investment products like stocks, bonds, and mutual funds. They typically are part of the asset allocation process to diversify a portfolio in an attempt to minimize risk. Some structured products offer a “principal guarantee,” which may provide some level of protection to the principal if held until maturity.

Call a Los Angeles Structured Products Lawyer Today

Similar to any investment, there are certain attendant risks. If you suffered significant investment losses after investing in structured products or if your stockbroker or brokerage firm failed to inform you or misrepresented these risks, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles structured products lawyer today for a consultation to discuss your rights and obligations.

Fraud & Class Action Lawsuit Los Angeles

A class action lawsuit is a type of lawsuit where one or several people file a lawsuit against a defendant for wrongdoing on behalf of an entire group of victims of the defendant’s misconduct. A class action lawsuit allows for the efficient litigation of a large-scale misconduct that affected hundreds, thousands, or even millions of victims in the same way.

The Benefits of a Class Action Suit

Class actions are popular because it allows all of the same claims for all class members to be resolved in a single proceeding, increasing efficiency and lowering the cost of litigation. Further, it can provide relief to the individual victims, who may not have the resources necessary to fight a large corporation on their own.

The Various Types of Class Action Lawsuit

There are many different types of class action lawsuits depending on the nature of the case. Some companies, whether intentionally or not, create, distribute or otherwise manufacture a defective product, or provide false or misleading information about the nature or safety of their goods on a widespread level. Other companies may find themselves on the wrong end of a class action for committing financial fraud on a large scale. A qualified Los Angeles attorney can help you determine if your case has merit for a potential class action filing.

Call a Los Angeles Class Action Lawyer Today

If you have been harmed because of a defective product, financial scam or other securities fraud, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles class action attorney today for a consultation to discuss your rights and obligations.

Los Angeles Mutual Fund Investing

A mutual fund is a company that pools money from a group of investors and invests in different securities, such as stocks and bonds. The various securities that make up the mutual fund are known as “the portfolio,” and investors can buy shares in the overall portfolio.

The Advantages of Investing in a Mutual Fund

Mutual funds are popular among investors because they tend to be diversified, which lowers the risk of loss if one or more of the securities within the portfolio fail to perform as expected. Further, many mutual funds offer low minimum investments so that there is an affordable entry point for investors. Mutual funds also generally can be sold without any difficulty.

The Disadvantages of Investing in a Mutual Fund

Similar to any investment, all mutual funds carry varying levels of risk. Even if your fund is diversified to mitigate risk, you could lose some or all of your investment if the securities held in the fund drop in value. Market conditions can also play a factor, and just because a fund did well in the past does not guarantee its performance in the future. Furthermore, the more volatile the securities in mutual fund portfolio, the higher the investment risk is.

Call a Los Angeles Securities Fraud Attorney Today

Investing in mutual funds should always fit your risk tolerance. If you have been steered into investing in a mutual fund that does not fit your profile, or if your broker failed to disclose the risk of a particular mutual fund, you should contact a Los Angeles securities fraud attorney today for a consultation to discuss your legal rights.