Reasonable-Basis Suitability

Attorney Representing Parties Harmed by Securities Fraud Nationwide

Many investors do not investigate the specific details regarding investments and rely on the advice of financial services professionals when considering how to invest their money. Unfortunately, in some cases, rather than making sound investments, a broker or financial advisor will use an investor’s money to further a fraudulent Ponzi scheme. Ponzi schemes can result in catastrophic financial losses, and investors harmed by Ponzi schemes may have legal recourse. If you were a victim of a Ponzi scheme, it is critical to engage a skilled attorney with experience pursuing claims against perpetrators of Ponzi schemes. New York securities lawyer Irwin Weltz has the skills and experience needed to help you seek compensation for your losses. Weltz Law is based in New York and will represent investors harmed by Ponzi schemes throughout the country.

What is a Ponzi Scheme?

While many people have heard of Ponzi schemes, few people know how to recognize and avoid such schemes. A Ponzi scheme is a fraudulent plan in which a broker or financial advisor takes money from investors but keeps the money rather than investing it. Brokers and financial advisors running Ponzi schemes are able to continue the scheme by paying the initial investors money that they believe is a return, but the money is actually principal from new investors.

For example, if an investor gives a broker $100,000 to invest in a stock, and the investor receives a dividend of $25,000 each month, the investor would likely believe that the stock is doing well. In Ponzi schemes, however, the money given to the broker is never invested, and the monthly “dividend” is not a profit but is money taken from another individual whom the broker convinced to invest. New investors are often persuaded to invest in Ponzi schemes when they hear about the high rates of return from current investors. Although investors in Ponzi schemes may receive purported returns initially, Ponzi schemes are not sustainable, and eventually they collapse, leaving investors with no money and no investments.

Signs of a Ponzi Scheme

There are certain elements that are common in most Ponzi schemes in New York or elsewhere. First, the investments offered in Ponzi schemes are typically very low risk but offer a high rate of return, whereas legitimate investments either yield high returns but involve substantial risk of losses, or are low risk but provide modest returns. Additionally, Ponzi schemes often pay high and consistent returns. Given market fluctuations, it is highly unusual for an investment to pay the same return each month. Thus, consistent returns are likely a sign that an investment is not valid.

Brokers and investment advisors involved in Ponzi schemes often employ complex investment strategies in an attempt to confuse investors and prevent any questions regarding the investment. However, any broker who sells securities must be registered with the Federal Industry Regulatory Authority (FINRA), and any securities that are sold must be registered with the Securities Exchange Commission (SEC). Thus, if a broker is not registered or attempts to sell an unregistered stock, it can be an indication that the broker is engaged in a fraudulent scheme. If you suffered financial losses due to a Ponzi scheme, you should contact a proficient securities litigation attorney as soon as possible to discuss your options for seeking damages.

Suitability Supervision?

Engage a Dedicated Securities Arbitration and Litigation Attorney

Ponzi schemes are illegal and cause substantial financial harm to unwitting investors. If you lost money in a Ponzi scheme, it is critical to engage a trusted securities litigation attorney to assist you in seeking to recoup your losses. New York attorney Irwin Weltz at Weltz Law has over two decades of experience representing parties in securities litigation and arbitration. Attorney Weltz is sensitive to the financial devastation that Ponzi schemes cause and will assertively pursue any damages that you may be entitled to recover to help you repair your losses. You can contact Weltz Law through the form online or at 877-935-8952 to schedule a consultation to discuss your case.

Client Reviews

I was introduced to Irwin when facing a regulatory issue which, at the time, felt overwhelming. From my first meeting with him, Irwin gained my trust and explained all options and potential outcomes in a way I could comprehend. He was there to talk me through any questions and concerns I had until we decided on the best option for me. On top of that, he is a genuinely caring person and has remained someone I go to for guidance throughout the years. I could not recommend him highly enough!

- Securities Industry

I found Irwin to be my advocate, in the best sense of the word. He truly cares about his clients, and because of his work ethic and perceptiveness, was an exceptional litigator in my lengthy and complicated case.

- Business Owner

I was referred to Irwin by a colleague who is in the securities business. I cannot thank him enough!. Irwin has been amazing…my case was complicated but Irwin has a way of looking at situations through different lenses and gets results. I can’t say enough about his “bedside manor”. As good as he is as an attorney, he’s an equally good person. He actually cares.

- Securities Industry

Irwin is a rare breed of lawyer, he’s honest, straightforward, smart and doesn’t over bill


Irwin has been my go-to lawyer for arbitration and regulatory matters for years. He’s smart, cost-efficient and gets results. I highly recommend him.

- B.D.