Stock Broker Fraud, Ponzi Schemes, And Deliberate Ignorance Often Operate In Conjunction With One Another
- Scam artists targeting unsophisticated investors will not hesitate to abuse SEC Regulation D (“Reg D”) in connection with an attempt to recruit a team of slippery brokers who will help them effect a fraudulent private securities offering. With an eye toward attracting unscrupulous financial advisers to sell the underlying securities, these dishonest charlatans frequently offer high commission payouts. Mesmerized by thoughts of lavish earnings, such financial consultants are often willing to deliberately ignore the due diligence obligations they maintain.In essence, they enthusiastically tout the purported virtues of the securities in question — even though they have scarcely lifted a finger to verify the accuracy of the information that has been imparted to them.
Brokers who are intent on implementing this type of willful blindness strategy should “think again.” Tersely stated, it will not even begin to insulate them from liability. The essential need to perform a due diligence investigation is solidly entrenched. That crucial function cannot be “whisked away” at the mere whim of a broker eying a robust commission.
The precise contours of a due diligence investigation are not subject to a rigid formulation. Nonetheless, as a general rule, it is readily apparent that a due diligence investigation focusing on a small company that was recently created must necessarily be more vigorous. Moreover, when “red flags” arise, those who shoulder the task of performing a due diligence investigation must “dig deeper,” and exhibit a heightened level of determination.
Investors who have fallen victim to brokers who intentionally declined — or simply neglected — to discharge their due diligence obligations must not lose heart. They are urged to consult with a securities litigation attorney who maintains a deep understanding of the rules and regulations governing private offering fraud. Stated otherwise, investors who have been duped in connection with the sale of restricted securities via a private offering should consider the potential benefits of reaching out to an astute securities litigation lawyer who possesses a considerable level of experience on that front. Chris Bebel is an accomplished Texas investors lawyer who has focused on securities fraud in Texas for decades. He is a skillful, polished securities fraud attorney who has developed a record of success while pursuing cases involving financial advisor fraud. Mr. Bebel works closely with Bradley Ellison, who has repeatedly distinguished himself by going the extra mile for clients who have been victimized by financial adviser fraud in Texas. Mr. Bebel and Mr. Ellison are currently laboring diligently to advance the interests of Texas investors who have sustained losses in connection with the Wood bridge Ponzi scheme. If you are a victim of securities fraud, reach out to Chris Bebel, an acclaimed Texas investors attorney.