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Ponzi Schemes

Heritage Law Office offers securities law services suing financial advisors and advisory firms for Ponzi Schemes. A Ponzi scheme is an fraudulent investment operation where the operator, an individual or organization, pays returns to its investors from new capital paid to the operators by new investors, rather than from profit earned through legitimate sources. These schemes usually collapse when it becomes difficult to find new investors or when a large number of investors attempt to cash out. 

The definition of a security is very broad, and includes many different types of investments, such as stocks, bonds, and mutual funds. The offering of securities must be registered with the SEC unless it meets an exemption.

Ponzi Scheme Warning Signs

There are several warning signs that indicate someone may be running a Ponzi scheme. Some of these are:

  • Consistent unusually high returns with little or no risk. If it sounds too good to be true, it probably is.
  • Overly consistent returns. Investments fluctuate; even well-managed ones have some down periods. Be wary of anyone who claims they can always deliver positive results regardless of market conditions.
  • Secretive or complex strategies. Avoid anyone who refuses to explain in detail how they make money or who makes grandiose predictions about future returns without being able to back them up.
  • Unregistered offerings. Always check to see if the person offering the investment is registered with the SEC by searching the SEC's EDGAR database before investing any money.
  • Missing documentation. Be careful of anyone who asks you to invest without providing written information about the investment “opportunity,” including a disclosure document like a private placement memorandum which should contain important details about risks involved as well as information about the management team running the show.

If you think you may have been the victim of a Ponzi scheme or other type of investment fraud, please contact Heritage Law Office by sending us a message or at 414-253-8500 for a free consultation with one of our experienced securities attorneys.

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