Agreements to buy or sell a certain amount of a particular commodity, at a specified price, at a specified point in time, are known as futures. Futures are traded in a wide variety of commodities, including precious metals, petroleum products, and agricultural products. Companies often use futures as a guarantee to supply themselves critical resources at a known price, reducing their risk. Individual investors can participate in futures trading, but it is a high-risk investment. Such investments are mainly suitable for sophisticated investors who can afford to lose their investment. Futures and commodities fraud is a growing problem, fueled in part by the growth of online futures trading.
Futures fraud occurs when a commodity broker, financial advisor, or other party engages in illegal activities or practices while selling futures to investors. Illegal activities typically involved in futures fraud include:
Unauthorized Trading – engaging in transactions on an investor's account without permission from the investor.
Misrepresentation – making false statements about an investment. This frequently involves lying about how profitable and low-risk an investment is.
Nondisclosure – when information is withheld from an investor that he has a legal right to know. Failure to tell an investor that an investment may be substantially risky would be a case of nondisclosure.
Churning – trading on an investor's account for the sole purpose of generating commissions, without regard for the best interests of the investor.
Misappropriation of Funds – usinag an investor's investment for anything other than the stated purpose. For example, taking money to purchase crude oil futures, but instead using the money to pay bonuses, would be an instance of misappropriation of funds.Do You Need A Futures Fraud Attorney?The Commodity Futures Trading Commission (CFTC) is the Federal agency that regulates the futures trading. They manage a reparations program for investors who are victims of futures fraud and have suffered losses due to illegal conduct. Investors may seek to recover actual losses and filing costs, but only in certain circumstances can they seek punitive damages. Investors can choose to represent themselves, or may be represented by an attorney. The CFTC cautions investors that neither the judge in a reparations hearing, nor any member of the CFTC staff, will investigate or litigate on behalf of any individual investor. The laws and regulations governing futures trading and futures fraud can be complicated. You may need an attorney to ensure that your interests and legal rights are protected.
Please contact us if you believe that you have been a victim of futures fraud or any other form of securities frau. Fill out the form below and tell us a little about your situation, and we will evaluate your case, with no cost or obligation to you.