The Ripple Effects of Stock Fraud on Society
Instead of placing your hard earned money into a savings account, most individuals choose to invest in the stock market. Since it has the potential to yield a substantial profit, a smart investor can become wealthy off their returns. However, with a good investment typically comes risks, and you need to protect yourself from being the victim of stock fraud.
Stock fraud can come in various forms that can be perpetuated from friends, experienced stock brokers and online investors. Their methods of fraud may include brokers stealing money from clients, using the funds to benefit their own purposes and giving out false information on quick ways to gain wealth. Doing your own research about the company and their investment track records can help you avoid being scammed.
The Impact of Stock Fraud
Stock fraud can have a negative impact on society and the future of the economy. Businesses both locally and worldwide can feel the damaging effects, and it can put many companies and corporations out of service for good. Even businesses that have known years and years of success can also be impacted by stock broker fraud and wiped out with one wrong move. In turn, the economy can take a downturn and cause spending, interest rates and employment opportunities to decline.
The Emotional Turmoil
One of the most troubling effects of stock fraud is the psychological unrest it can have on its victims and their families. In addition to being unable to recover financially, many victims may experience feelings of embarrassment, reduced sense of security and low self-esteem. This can take years for many to resolve, while others may never recoup any of their damages. Retirement, life savings, college funds and other important financial areas can be affected by stock fraud and leave many individuals having to work beyond their retirement years.
Ways to Avoid Being a Victim
Inexperienced and knowledgeable investors can all be taken advantage of by these thieves and you need to know how to protect yourself.
- Proper Education – To avoid being a targeted victim of stock fraud, you can learn the basics of investing and the risks versus returns on your investment. If something sounds too good to be true, you should trust your instincts because it probably is.
- Choose a Reputable Company – Doing business with someone over the Internet or a stranger can be financially crippling. Make sure to do your research, check their credentials and verify their track record.
- Mixing Business with Pleasure – Stock fraud typically occurs more frequently with individuals who know or trust their investment broker from church, social organizations and work.
- Don’t Be Afraid to Ask Questions – Before investing in any type of plan, don’t be afraid to ask tough questions such as will there be regular performance reports, what is their incentive to promote this product and do they have any personal interest invested in it?
- Take Your Time – If a salesperson puts pressure on you to invest in a particular stock, just say no. This is your hard earned money that you want to invest and you have the right to do your own investigation.
Protecting you and your family against fraud is easy and can help preserve your nest egg. By putting in some time, effort and lots of legwork, you can protect your financial wealth and find a brokerage that is trustworthy and still provides a significant yield on your return.
Nadine Swayne writes this article to help individuals seeking to jump into the investment pool. At Page Perry, LLC, their legal team represents clients who have fallen victim to stock broker fraud and offers attentive and personal hands-on service to each case. With over 150 years of collective experience, they successfully represent investors against financial institutions that engage in unlawful conduct.
Photo credit: http://artsonearth.com/www/wp-content/uploads/2013/05/STOCK-GUYS.jpg
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