Investigating Financial Advisor Fraud


The SEC launched an investigation into the actions of Michael Barry Carter, an ex-investment adviser, following his felony financial adviser fraud charge. The charges stem from allegations that Carter used his position as an investment adviser to defraud investors and brokerage customers. Another elderly client was also victim to a bogus scheme. The SEC also filed civil lawsuits against several financial advisers. The SEC believes that Mr. Carter’s misconduct could have caused the deaths of two people and is looking into other alleged fraudulent conduct.

Financial advisor complaints

Many financial advisors have been involved in financial advisor complaints. Ponzi schemes are one example. They pay current investors out of money that has been deposited by new investors. The advisor siphons some of this money during this scheme. Another type of fraud is called affinity fraud, and involves targeting groups of people. Affinity fraud is a common type of scam, whereby an advisor connives to get the group to participate in the fraud because they know the perpetrators or have friends who are also in the industry.

Although the rate of fraud committed by financial advisors has declined in recent years, it is still a serious problem. According to the SEC, 218 fraud offenders were convicted in 2013, which is almost 20 percent less than a decade ago. However, the number financial advisors that have been arrested in recent years has slightly increased. In 2016, the SEC reported that there were 221 offenders, nine less than in 2017, and 18.4 percent fewer than in 2013.

According to the SEC, the number of financial advisor fraud cases has increased in the past five years. Although the number of fraudsters convicted has decreased slightly since 2013, it is still increasing. According to the SEC report, there were 282 securities fraud cases in 2013 and 218 in 2015. However, the number has increased since then. In 2016, the SEC reported 221 criminal and civil crimes committed by financial advisers. Many non-registered financial advisers also exist.

A large number financial advisors engages in fraudulent activities. A Ponzi scheme is a typical example. The current investors are paid from the money of the new investors in this scheme. The advisor then siphons some of the money and keeps the remainder for himself. A similar scam, called affinity fraud, targets a group of people who were influenced by their mutual friends. The scheme often convinces victims to follow the advice given by their friends.

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