California Securities Attorneys
Investment fraud can happen anywhere—even in California. A recent case of investment fraud in California illustrates why you may need a California securities attorney.
As we previously reported, back in October 2019 Robert Shapiro, CEO of the Woodbridge Group of Companies, an investment firm based in Sherman Oaks, California, was sentenced to 25 years in prison for orchestrating a massive Ponzi scheme. He ripped off 7,000 investors nationwide, mostly retirees. When his five-year scam ended, he had scammed these vulnerable investors out of $1.3 billion. Many of the brokers who sold Woodbridge securities were unregistered, operating on the fringes of the securities industry, but others were FINRA registered representatives—and California securities attorneys are suing them for recommending these unsuitable investments.
This case illustrates an important principle: anyone can become a victim of stockbroker fraud, which can go undetected for years, wreaking havoc on investors’ finances. As such, it’s important to become familiar with how you as an investor can protect yourself, preventing the need for a California securities attorney. It’s also important to recognize that the burden of preventing stockbroker fraud does not fall to investors alone; the state also has a crucial responsibility to protect investors. Read on to learn about how California protects investors from broker fraud.How California Protects Investors from Broker Fraud
How does California protect investors from broker fraud? The California Department of Business Oversight, Division of Corporations plays a critical role in investor protection. The California securities commissioner’s title is Commissioner of Business Oversight, and he oversees the regulation of securities in California. The Department of Business Oversight (DBO) Broker-Dealer and Investment Adviser Division (BDIA) licenses and regulates broker-dealers and investment advisers in California. Pursuant to the California Corporations Code Sections 25210 and 25230, the Division reviews applications for registration and, if broker-dealers and investment advisers meet the requirements, approves them. Pursuant to California Corporations Code Section 25241, the California Department of Business Oversight (DBO) conducts periodic reviews and inspections of California broker-dealers and investment advisers to ensure that investors are protected.
The Corporate Securities Law of 1968 regulates securities in California, determining which securities must be registered with the Commissioner of Business Oversight and which are exempt from registration. But it is important to understand that exempt securities are not exempt from regulation, just the administrative procedures of registration; the issuer can still be held liable for fraud or deceptive practices. The Corporate Securities Law of 1968 protects investors from fraud and deception by providing statutory and common law remedies for those harmed by investment fraud. The Corporate Securities Law of 1968 is just one of many state-specific “blue sky laws” that regulate securities on the state level. For more information on this topic, see our article “What are ‘Blue Sky Laws’?”
What happens if the Commissioner of Business Oversight finds that broker-dealers or investment advisers may have violated securities laws, like the Corporate Securities Law of 1968? These cases are referred to the Enforcement Division, which then evaluates the cases and refers them, if necessary, for administrative, civil, or criminal action.
Of course, while a California securities attorney can help defrauded investors, it is better to prevent financial fraud than to attempt to remedy it after it has already occurred. As the saying goes, “an ounce of prevention is worth a pound of cure.” Thus, the California Department of Business Oversight makes Consumer Education and Outreach a priority. For example, the DBO offers self-paced online courses on various financial literacy topics, including:
- Financial Foundations
- Building Financial Capability
- Investing in your Future
- Financial Caregiving
- Preparing for Retirement
- Financial Wellness in Uncertain Times
The DBO also distributes brochures on financial literacy, including how investors can protect themselves from fraud. These brochures, available in both English and Spanish, include:
- About the Department of Business Oversight
- 8 Tips for Financial Success
- Financial Tips for Women
- Common Financial Frauds and Scams
- Investor Self-Defense
- Financial Elder Abuse
- “Check Before You Invest” worksheet
Senior citizens are particularly vulnerable to financial fraud and financial fraud, as we have written in our article “How FINRA Protects Elderly Investors from Financial Exploitation.” As such, California runs the Seniors Against Investment Fraud (SAIF) Program to educate Californians ages 50 and older about how to protect themselves from financial fraud. The DBO also issues periodic Investor Alerts. For example, the agency has issued advisories such as:
- “Advisory to Consumers on Private Placements” (May 2020)
- “Be Vigilant Against Scams and Unlawful Activities Seeking to Exploit Heightened Economic Anxieties” (April 2020)
Again, while California securities attorneys stand ready to help defrauded investors, it is better to prevent fraud in the first place. But while the California Department of Business Oversight does crucial and important work, if you are seeking to recover investment losses, you should contact a California securities attorney.Next Step: Contact a California Securities Attorney
While investing is one way to grow your net worth, as an investor you must stay informed about fraud to protect yourself and safeguard your financial future.
If you have questions about your investments, please contact the experienced securities attorneys of Fitapelli Kurta. Our securities fraud attorneys have worked with investors from California. Whether you’re in Los Angeles, Sacramento, San Francisco, Ojai, Simi Valley, San Diego, or any other city or town in California, we’re here to help you. We only get paid if you do. Our attorneys work on contingency; we only collect a fee from clients if we can recover money on their behalf. Call (877) 238-4175 or email email@example.com for your free case consultation.