Ponzi Schemes

Atlanta Lawyers Representing Parties Defrauded by Ponzi Schemes

Parties interested in buying securities often lack the time or expertise to conduct a thorough evaluation of the best way to allocate their funds and will rely on the advice of a broker or financial advisor when choosing investment opportunities. While financial services representatives have a duty to make suitable investments on behalf of their clients, some ignore their obligations and instead use the money they receive from their clients to further Ponzi schemes. Ponzi schemes cannot be sustained for a long time, though, and when they collapse, parties who unwittingly invested in the scheme typically suffer devastating financial losses. If you lost assets in a Ponzi scheme, you might be able to recover compensation, and you should speak to an attorney as soon as possible. The skilled Atlanta business litigation lawyers of Poole Huffman can advise you of your rights and aid you in pursuing any damages recoverable under the law. We regularly represent parties in business litigation matters in Atlanta, Decatur, and Tucker.

What is a Ponzi Scheme?

Ponzi schemes are fraudulent plans in which a broker or financial advisor promises high returns on principal investments but never actually invests the client’s funds. Instead, the party operating the scheme will pay investors what they represent is a return on their investment, but is actually their own principal or that of another investor. Typically, the returns are large, leading parties to believe the investment is sound. Additionally, parties running Ponzi schemes will point to the high rate of return to persuade other people to invest. In fact, the broker or financial advisor will often recruit unknowing victims to attest to their high rate of return. Brokers and financial advisers engaged in Ponzi schemes will also often provide investors with fraudulent documentation to support their claims that they are offering positive investment opportunities.

Ponzi schemes generally are not supported by any legitimate business venture and do not produce any actual income. Instead, they are pyramid schemes that require a constant influx of new investors to continue operating. They are not sustainable in the long term, however, and eventually, the pyramid collapses, causing most investors to lose their principal investment and leaving them without any legitimate security interests.

Identifying Ponzi Schemes

Certain features indicate an investment opportunity is a Ponzi scheme. For example, Ponzi schemes typically pay high returns that are consistent from month to month. As the market continuously fluctuates, it is unlikely that investors would receive the same return every month, and returns that do not waiver may be a sign an investment is not valid. Additionally, Ponzi schemes generally present investment opportunities that offer a high rate of return for relatively low risk, which is uncharacteristic of legitimate investment prospects in which there is usually a direct correlation between the rate of return and the potential risk.

Pursuant to federal law, all securities offered for sale have to be registered with the SEC (Securities Exchange Commission), and all brokers have to be registered with FINRA (the Federal Industry Regulatory Authority). Some securities and salespersons, must also be registered with the Georgia Secretary of State’s Office. As such, if brokers cannot produce documentation showing that they or the stocks they offer are properly registered, it is a clear indication that they are likely attempting to defraud investors. People that deceive investors via Ponzi schemes may be ordered to pay civil penalties and return the funds they unlawfully obtained from investors. People who suffer losses due to Ponzi schemes may be able to pursue claims against parties that assisted in perpetrating the scheme, like banks, accountants, and attorneys.

Speak to a Dedicated Atlanta Attorney

Ponzi schemes are unlawful and people that unknowingly invest in them often suffer significant financial harm. If you sustained damages due to a Ponzi scheme, you should speak to an attorney about your rights and potential avenues for recouping losses. The dedicated Atlanta Ponzi scheme lawyers of Poole Huffman are mindful of the financial devastation Ponzi schemes often cause, and if you hire us, we will work diligently to help you pursue any compensation you may be owed. We have ample experience representing parties harmed by fraudulent investment schemes in Atlanta and Decatur and in Tucker, where our office is located. We also aid people with other business litigation issues in cities throughout DeKalb, Cobb, Fulton, and Gwinnett Counties. You can reach us at 404-373-4008 or through our online form to set up a confidential consultation.

Client Reviews

Todd took over the case within weeks of trial, and crafted a trial strategy and crystal-clear message that impressed our...

Dick W.

Todd won a $400k judgement for me with less than 30 days to prepare. In another case he defended me against a bank with the...

Richard

Mr. Poole works especially hard to understand the matter prior to taking action, and is able to weigh the cost of legal...

A.A.
Photograph of a man in a suit with a pen in hand, leaning on a sheet of paper on a desk. In his other hand, he holds a gavel, and on the table, there is also a balance.

Get in Touch

Call Us Today 404-373-4008