Paths that can lead to recovery
Investment fraud victims often have more than one possible route, and the routes are not mutually exclusive. If a registered broker or brokerage firm was involved, claims against the firm usually go to FINRA arbitration under the account agreement. If the SEC or a state regulator has sued, a court may appoint a receiver to gather assets and run a claims process for investors. In criminal cases, courts may order restitution, and forfeited assets may be returned to victims through a remission process. Civil suits against third parties such as banks, auditors, or promoters are sometimes possible but depend on what those parties knew or did.
When you were paid along the way
Some victims received payments from the scheme before it collapsed, and in Ponzi-type schemes those payments may have come from other investors' money. A receiver or bankruptcy trustee may seek to recover payments that exceeded what an investor put in, and sometimes looks at other transfers as well. That can feel unfair, but it is a common part of these cases. Keep complete records of every deposit and withdrawal, including statements, wire confirmations, and tax forms, because the net figure often determines both what you can claim and whether you face a claim yourself.
What to do now
Report the fraud to the SEC, FINRA, the New York Attorney General, or the FBI, depending on who was involved, and keep a copy of your report. Be alert to recovery scams; people who contact victims and charge fees to retrieve lost funds are often running a second fraud. Claims processes and arbitrations have deadlines, and notices from a receiver can be easy to miss if your address has changed. At a first meeting we review what you invested, who you dealt with, and which proceedings already exist, and we tell you which avenues look realistic. Some losses cannot be recovered, and knowing that early is useful too.
