What is investment fraud?

Investment fraud is a type of financial crime that involves taking advantage of unsuspecting investors. In West Virginia, investment fraud laws make it illegal to knowingly deceive, mislead, or defraud someone into investing their money or assets into a fraudulent security or investment. Investment fraud includes, but is not limited to, stock and commodity fraud, insider trading, Ponzi schemes, and the sale of unregistered securities. Common tactics used to commit investment fraud include providing false or misleading information about the security or investment, concealing important risks, or lying about the qualifications or experience of the broker or investment promoter. Investment promoters can also entice individuals to invest with false promises of high returns or the chance to get in on the “ground floor” of a promising venture. Victims of investment fraud often suffer significant losses and can find themselves in a difficult financial situation. In order to prosecute a perpetrator of investment fraud in West Virginia, the state must prove that false or misleading statements were made with intent to deceive, and that the investors suffered a financial loss as a result. If convicted, perpetrators may face severe penalties including jail time and/or restitution payments to investors. Investors should be wary when they are considering investing their money in any security, and take the appropriate steps to protect themselves from potential investment fraud. Researching the security and company background, understanding the terms of the investment, and verifying any potential promises made by the broker are all important steps to take before investing.

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