Utah securities fraud lawyers represent investors in cases of securities fraud, a type of fraud that involves investor losses following fraud or misconduct by a financial professional. Utah has an especially high rate of fraud, including investment fraud. According to Utah newspaper Deseret News, the State has one of the highest per-capita rates of fraud losses in the U.S.
Investors should know that there are federal and state laws designed to protect them from fraud and broker misconduct, as well as securities attorneys who can help if they suffer unfair investment losses.
The Utah Uniform Securities Act
States have their own securities laws called Blue Sky Laws. These laws are meant to offer another layer of protection for investors.
Chapter 1 of the Utah Uniform Securities Act:
It is unlawful for any person, in connection with the offer, sale, or purchase of any security, directly or indirectly to:
- Employ any device, scheme, or artifice to defraud;
- Make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; or
- Engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.
Securities Fraud in Utah
Investors should be aware of the following types of securities fraud. If any of these match your situation, reach out to a securities attorney to see if you have a case. But keep in mind that this is just a sample of the types of cases Utah investment fraud attorneys frequently review – if you think your broker employed any fraud or deception, reach out to a securities attorney.
Unsuitable Investments and Regulation Best Interest
Financial professionals are held to different standards depending on their registration. Registered Investment Advisers (RIAs) are fiduciaries, meaning they are required to act in their clients’ best interests. Under Reg BI, stockbrokers are supposed to disclose their conflicts of interest. Investors should cover all their bases by asking about commissions brokers may receive for recommending an investment.
Misrepresentation or Omission of Material Fact
If a broker fails to include important information when they describe an investment – like maturity dates or fees – they may have violated FINRA Rule 2020, which prohibits misrepresentations and omissions, as well as Utah securities laws.
Short-Term Trading of Long-Term Products
Certain products, like mutual funds and Unit Investment Trusts, are not suitable for short-term trading. Brokers may, however, encourage investors to sell shares only to purchase similar products – all for the sake of the broker’s own commissions. This constitutes a violation of FINRA Rule 2111, the Suitability Rule.
Elder Abuse
A recent report suggests that elder financial abuse may be on the rise in Utah. Seniors who believe their financial professional defrauded them should contact a Utah securities attorney right away. Common types of elder abuse include persuading an elderly person to add the broker as a beneficiary to their will or borrowing money from a client. In some cases, brokers have convinced clients to liquidate their retirement accounts in order to purchase high-risk, high-commission investments.
Communications with the Public
FINRA Rule 2210 requires brokerage firms to review correspondence with the public – including advertising – to ensure that the communications are “based on principles of fair dealing and good faith,” and must be “fair and balanced.”
Ponzi Schemes
Utah has an especially high rate of Ponzi schemes. Its business-friendly laws have also led to a large number of shell companies that are frequently the subject of fraudulent schemes.
Why Do I Need a Utah Securities Attorney?
Investors may need to go through FINRA arbitration in order to recover their losses. The Financial Industry Regulatory Authority offers arbitration as a potentially quicker avenue of recovery than suing in civil court. Furthermore, investors may be required to use FINRA arbitration rather than a civil lawsuit by a pre-dispute arbitration clause in the investment contract.
Brokerage firms and brokers always come prepared to FINRA arbitration hearings with their own legal counsel. Investors may feel more confident pursuing a case with an experienced securities attorney to help guide them through arbitrator selection, discovery, and arbitration hearings.
Kurta Law Can Help
If you lost money after working with a Utah stockbroker, consider contacting a Utah securities attorney for help. Our attorneys are experts in Utah securities laws as well as federal rules and regulations that may apply to your potential stock fraud case. Contact us today for a free case evaluation – Kurta Law does not charge anything upfront and we do not collect a fee unless we win your case. Call (877) 600-0098 or info@kurtalawfirm.com.