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26 Dec 2022

If you saw a movie a few years back about a character on Wall Street who was arrested for committing investment fraud and was named after a wolf, you will probably think that in order to be accused of committing investment fraud, you have to be very careless with money and practically flaunt that you are scamming people.

But this is not the case, and in this day and age there are more subtle reasons why you may be accused of committing investment fraud, especially if you are a financial advisor or work for a company that offers this service.

At ABV Solicitors, our fraud solicitor has successfully defended many people and businesses who have been accused of committing investment fraud, and we know how to have any processes and confiscation proceedings halted or overturned, so you can get on with your life unscathed by such a devastating accusation.

But what is investment fraud, and why exactly have you been accused of it? This article by our fraud solicitor aims to answer this question and many more.

What is investment fraud?

Going back to the example of the chap on Wall Street, there are many similarities between the accusations levied against him and the law in the UK now.

Indeed, according to our fraud solicitor, investment fraud occurs when a company, entity or person uses false information to get investors to deposit money into a stock or bond, even though it is not a good investment opportunity.

So, if someone is pressured into investing in a company that they know nothing about but are promised a high return, that is an example of investment fraud.

I’ve read there are different kinds of investment fraud – what are they?

There are a few types of investment fraud, with the most prevalent being:

• Pyramid schemes- these are also known as multi-level marketing.
• Affinity fraud- these are similar to pyramid schemes but target a specific group or race.
• Pump and dump fraud- this is the most similar to the character on Wall Street’s fraud type, creating a portfolio of fake investments to then pressure investors to put their money into.

Why am I being accused of committing investment fraud?

There are a few reasons why you may be being accused of this type of fraud.

Perhaps you have been reported by an anonymous whistleblower, perhaps your sales tactics are too aggressive, or perhaps a piece of misinformation passed on by a member of your team has been reported.

The important thing is not to panic and to contact our legal team at ABV Solicitors as soon as possible so we can begin building your defence.

How will you prove I am innocent?

Our team will primarily look at intent relating to your business and the claims made. If we can determine that your intent was to be honest with those who were investing in your business or investment ventures, then we will have a high probability of having any accusations overturned.

What are the punishments for investment fraud?

If you are found guilty of investment fraud, the punishment will vary based on the severity of the fraud committed and the money involved. A starting sentence would be 12 months imprisonment and an unfixed fine.