We represent investors who lost money as a result of investments in inappropriate, questionable, or downright fraudulent alternative investments. The majority of our cases arise out of negligent due diligence as to questionable or fraudulent alternative investments, and recommendations to invest in unsuitable alternative investments.
Alternative investments represent a spectrum of assets lying outside the realm of traditional stocks, bonds and cash equivalents. Many alternative investment options include but are not limited to:
- real estate
- oil-and- gas and other energy investments
- hedge funds
- private debt and equity
Alternative investments are often complex investments with limited regulations and many alternative investments also require high minimum investments and implement lofty and complex fee structures. These investments typically carry more risk and volatility and have low liquidity and less opportunity to publish verified performance information. Alternative investments also usually hold significant fees and costs.
Wall Street has created a bevy of alternative investments and they are now viewed as a mainstay by most financial institutions and comprise a significant percentage of Wall Street’s revenues.
Some firms and brokerages even offer their own proprietary alternative investment products. Brokers and investment advisors have jumped on the popularity of alternative investments and promoted and advertised them as an alternative to the stock market or as part of a hedging or
diversification strategy to minimize market volatility. Investors should be aware of the myriad risks involved with alternative investments which
include but are not limited to the following:
- inherent conflicts of interest
- high fees and commissions
- lack of transparency
- illiquid, non-traded investments
- lack of securities industry regulation
- lack of suitable performance benchmarks
The SEC has also found certain problems during its examination of advisory firms that sell alternative investments, including:
- due diligence practices that different than described in advisor disclosures
- omission of alternative investment due diligence policies and procedures
- potentially misleading information in marketing materials
Alternative investments often come with higher-than- typical commissions. These products are often sold by a large group of different broker-dealers which may have their own fees and costs. Also, a broker might get a large commission that pays the broker from a client’s investment long before the client sees any money and thus limits the investor’s earnings.
If you believe you may have lost money in alternative investment schemes please contact us for a free, no-obligation consultation regarding your legal situation and potential recovery options, by phone at 888-998- 0530, via email at firstname.lastname@example.org, or through the contact form on this page.