Investment Fraud
Investment fraud devastates families, retirement accounts, and financial security. When a broker, financial advisor, or investment firm betrays your trust, you need an experienced investment fraud lawyer who understands how the securities industry works from the inside out.
At Varnavides Law, we represent investors who have suffered losses due to broker misconduct, unsuitable investment recommendations, and securities fraud. Gary Varnavides spent 10 years at Sichenzia Ross Ference LLP defending broker-dealers and financial institutions against investor claims. Now he uses that insider knowledge to fight for defrauded investors throughout California and nationwide.
Key Takeaways
- Investment fraud cost Americans $4.6 billion in 2023, according to the Federal Trade Commission
- FINRA arbitration resolves most securities disputes in 12-14 months
- An investment fraud lawyer can pursue recovery through FINRA arbitration, court litigation, or regulatory complaints
- Contingency fee arrangements mean no upfront attorney fees in most cases
- California investors have strong protections under state securities laws
What Is Investment Fraud?
Investment fraud occurs when a broker, financial advisor, or investment firm deceives investors to generate commissions, conceal losses, or steal assets. These schemes violate federal securities laws, state regulations, and FINRA rules that govern the conduct of securities professionals.
The SEC brought 583 enforcement actions in fiscal year 2024, resulting in $8.2 billion in financial remedies. This record-breaking enforcement demonstrates the scale of investment fraud affecting American investors.
An investment fraud lawyer evaluates your situation, identifies legal violations, and pursues maximum recovery through the most appropriate legal channel.
Common Types of Investment Fraud
Investment fraud takes many forms. Understanding the type of misconduct you experienced helps your investment fraud attorney build the strongest possible case.
Unauthorized Trading
Brokers executing trades without your knowledge or approval. This violates FINRA Rule 3260 and your brokerage agreement, potentially generating excessive commissions while exposing your account to unwanted risk.
Account Churning
Excessive trading designed to generate commissions rather than serve your investment goals. Churning often results in substantial losses from transaction costs and poor investment decisions.
Unsuitable Recommendations
Recommending investments that do not match your risk tolerance, investment timeline, or financial situation. FINRA Rule 2111 requires brokers to have a reasonable basis for every recommendation.
Misrepresentation and Omission
Providing false information or failing to disclose material facts about an investment. This includes hiding risks, exaggerating returns, or concealing conflicts of interest.
Ponzi Schemes
Fraudulent investment operations that pay returns to earlier investors using capital from new investors. These schemes inevitably collapse when new investment slows, leaving most investors with total losses.
Breach of Fiduciary Duty
When investment advisors or brokers with fiduciary obligations put their interests ahead of yours. This includes self-dealing, conflicts of interest, and recommending proprietary products that benefit the firm.
Warning Signs You May Be a Victim
Many investors discover fraud only after significant losses. Watch for these warning signs that may indicate your broker or financial advisor engaged in misconduct:
Warning Signs of Investment Fraud
- Unexplained losses that do not match market performance
- Account statements showing trades you did not authorize
- Frequent trading activity generating substantial commissions
- Investments concentrated in a single stock, sector, or product
- High-pressure tactics to invest quickly or add more money
- Difficulty accessing your funds or getting straight answers
- Promises of guaranteed returns with no risk
- Investments you do not understand or were not properly explained
According to the FINRA 2025 Regulatory Oversight Report, investment fraud by bad actors targeting investors directly has increased significantly, particularly through social media and imposter websites. Fraudsters increasingly use sophisticated tactics, including AI-generated content and deepfakes, to appear legitimate.
How an Investment Fraud Lawyer Can Help
An experienced investment fraud lawyer provides comprehensive representation from initial case evaluation through final recovery. At Varnavides Law, we handle every aspect of your securities claim.
| Service | What We Do | Why It Matters |
|---|---|---|
| Case Evaluation | Review account statements, trade records, and communications to identify violations | Determines the strength of your claim and potential recovery |
| Damages Calculation | Work with forensic accountants to quantify your losses | Maximizes your recovery by documenting all compensable damages |
| Forum Selection | Advise whether FINRA arbitration, court litigation, or regulatory complaints best serve your interests | Choosing the right forum can significantly impact outcomes and timelines |
| Discovery and Investigation | Obtain broker records, communications, and firm policies through formal discovery | Uncovers evidence that proves misconduct and supports your claim |
| Negotiation and Settlement | Negotiate with opposing counsel to reach fair settlements when appropriate | 60-70% of FINRA cases settle, often providing faster resolution |
| Hearing Representation | Present your case at FINRA arbitration hearings or in court | Experienced advocacy can make the difference in contested cases |
Legal Options: FINRA Arbitration and Court Litigation
Most investment fraud claims proceed through FINRA arbitration rather than traditional court litigation. Your brokerage agreement likely contains a pre-dispute arbitration clause requiring this process.
According to FINRA’s 2024 Dispute Resolution Statistics, the average arbitration case now resolves in approximately 12.5 months, an improvement from 14.6 months in 2023.
FINRA Arbitration Timeline
Statement of Claim filed, then Answer due (45 days). Arbitrator selection (30-60 days). Discovery exchange (90-120 days). Pre-hearing conferences. Evidentiary hearing (1-5 days typically). Award issued within 30 days of hearing close.
Why Choose FINRA Arbitration?
FINRA arbitration offers several advantages for investment fraud victims:
- Faster resolution than court litigation, typically 12-14 months
- Lower costs than federal or state court proceedings
- Specialized arbitrators with securities industry knowledge
- Streamlined discovery focused on relevant documents and information
- Final and binding decisions with limited grounds for appeal
When Court Litigation May Be Appropriate
Some investment fraud cases proceed in state or federal court, particularly when:
- No arbitration agreement exists
- The claim involves non-brokerage investments (hedge funds, private placements)
- Class action treatment is appropriate
- You seek punitive damages unavailable in arbitration
Securities litigation follows traditional civil procedure rules, including more extensive discovery and potential jury trial. Court cases typically take longer but may result in larger recoveries in certain circumstances.
California Securities Law Protections
California investors benefit from strong state securities laws that complement federal protections. The California Corporations Code Section 25400 prohibits securities fraud and manipulation, while Section 25401 addresses material misrepresentations and omissions.
California law also provides:
- Broader definitions of securities fraud than federal law
- Extended statute of limitations for certain claims
- Strong consumer protection remedies
- Elder abuse protections for investors over 65
Our Los Angeles-based practice understands California securities law and uses these protections to strengthen your claim.
Damages and Time Limits for Investment Fraud Claims
Investment fraud victims may recover several types of damages depending on the nature of misconduct and applicable law:
Compensatory Damages
- Out-of-pocket losses (difference between what you paid and received)
- Well-managed account damages (what you would have earned with proper management)
- Market-adjusted damages (losses compared to relevant benchmarks)
- Consequential damages (tax consequences, financing costs)
Additional Remedies
- Disgorgement of commissions earned through misconduct
- Rescission (unwinding the transaction)
- Punitive damages in court cases involving egregious conduct
- Attorney fees in certain statutory claims
Statute of Limitations
Time limits apply to investment fraud claims. Acting promptly protects your rights and preserves evidence.
| Claim Type | Time Limit | Notes |
|---|---|---|
| FINRA Arbitration | 6 years from occurrence | FINRA eligibility rule; shorter contractual limits may apply |
| Federal Securities Claims (10b-5) | 2 years from discovery, 5 years absolute | Discovery rule may extend the deadline |
| California Securities Claims | 4 years from discovery, 5 years absolute | Under California Corporations Code Section 25506 |
| California Elder Abuse | 4 years | May provide additional remedies for investors 65+ |
Important: These deadlines are general guidelines. Your specific situation may involve different limitations periods. Contact an investment fraud lawyer promptly to ensure you do not lose your right to recover.
Why Choose Varnavides Law?
Selecting the right investment fraud attorney significantly impacts your case outcome. Gary Varnavides brings a unique combination of experience and insight to investor representation.
Insider Knowledge, Investor Advocacy
Gary spent 10 years at Sichenzia Ross Ference LLP defending broker-dealers and financial institutions against investor claims. He knows how the other side thinks, argues, and defends cases. Now he uses that insider knowledge exclusively to represent defrauded investors.
Recognized Excellence
Gary has been recognized as a Super Lawyers Rising Star from 2015 through 2023, an honor reserved for the top 2.5% of attorneys in the New York Metro area. He is licensed to practice in California, New York, and New Jersey.
Client-Centered Representation
We handle a limited number of cases to provide personalized attention to every client. You work directly with Gary, not junior associates or paralegals. We keep you informed throughout the process and respond promptly to your questions.
Our Process: From Consultation to Recovery
We follow a systematic approach to maximize your recovery while keeping you informed at every stage.
1. Free Consultation
We review your situation, explain your options, and provide an honest assessment of your case. No obligation, no pressure.
2. Case Investigation
We obtain and analyze account records, trading history, communications, and broker backgrounds to build your case.
3. Claim Preparation
We draft a comprehensive Statement of Claim documenting violations and damages, then file with FINRA or the appropriate court.
4. Discovery
We exchange documents and information with the opposing party, take depositions, and gather evidence supporting your claim.
5. Negotiation
We pursue settlement when it serves your interests. Approximately 60-70% of FINRA cases settle before hearing.
6. Hearing or Trial
If settlement is not possible, we present your case to arbitrators or a judge with the skill developed over hundreds of proceedings.
Fee Structure
We handle most investment fraud cases on a contingency fee basis:
- No upfront attorney fees – We only get paid if we recover money for you
- Fee percentage discussed during consultation – We explain our fee arrangement clearly before you decide to proceed
- Case costs – You remain responsible for case costs (filing fees, expert witnesses, deposition transcripts), though we can discuss payment arrangements during your consultation
Schedule a free consultation to discuss your case and fee arrangement.
Frequently Asked Questions
How much does an investment fraud lawyer cost?
Most investment fraud lawyers, including our firm, work on a contingency fee basis. This means you pay no attorney fees unless we recover money for you. The fee percentage is discussed during your initial consultation. You may also be responsible for case costs such as filing fees and expert witnesses.
How long do investment fraud cases take?
FINRA arbitration cases typically resolve in 12-14 months. Court litigation generally takes longer, often 18-24 months or more. Many cases settle before hearing, which can speed resolution. We provide realistic timeline estimates based on your specific situation during consultation.
What evidence do I need for an investment fraud claim?
Key documents include account statements, trade confirmations, correspondence with your broker or advisor, prospectuses, and any written investment recommendations. Even if you have limited documentation, we can obtain additional records through formal discovery. Bring whatever you have to your consultation.
Can I sue my broker if I signed a brokerage agreement?
Yes. While brokerage agreements typically require arbitration rather than court litigation, you can still pursue full recovery through FINRA arbitration. Arbitration agreements do not waive your right to recover damages for broker misconduct. An investment fraud attorney can evaluate your agreement and advise on the best approach.
What is the difference between FINRA arbitration and court litigation?
FINRA arbitration is a private dispute resolution process required by most brokerage agreements. It is generally faster and less expensive than court. Court litigation follows traditional civil procedure, allows broader discovery, and may be available for jury trial. Your attorney will recommend the appropriate forum based on your situation.
How much can I recover in an investment fraud case?
Recovery depends on your documented losses, the strength of evidence, and the financial resources of the defendants. Investors may recover out-of-pocket losses, lost profits, consequential damages, and in some cases attorney fees. We provide a realistic assessment of potential recovery during your consultation.
What if my broker has left the firm or the firm closed?
You may still have viable claims. Brokerage firms have supervisory obligations and may remain liable for departed brokers’ misconduct. FINRA maintains records of broker registrations and disciplinary history. SIPC may provide limited protection if a firm becomes insolvent. We investigate all potentially responsible parties.
Is there a deadline to file an investment fraud claim?
Yes. FINRA arbitration claims must generally be filed within six years of the events giving rise to the claim. Federal and state securities law claims have their own, often shorter, deadlines. Contact an investment fraud lawyer promptly to protect your rights. Delay can result in losing your ability to recover.
Take the First Step: Free Consultation
Speak with an Experienced Investment Fraud Lawyer
If you have suffered investment losses due to broker misconduct, unsuitable recommendations, or securities fraud, we want to hear from you. Gary Varnavides personally reviews every potential case and provides honest assessments of your options.
Contact Varnavides Law today for a free, confidential consultation. We serve investors throughout California and nationwide.
Related Practice Areas
Our securities law practice handles a range of investor claims:
- FINRA Arbitration – Representing investors in securities disputes
- Securities Fraud – Claims involving misrepresentation and deception
- Securities Litigation – Court-based recovery for investment losses
