The trading of commodities, futures, and derivatives can be highly lucrative if it’s handled properly. Unfortunately, fraudulent management of your investments can often prevent profits, so it’s important to make sure you have an attorney on your side who can help you through futures and securities trading issues. If you need assistance with litigation concerning trades and investments, contact Hart & David.
Futures and Commodities Fraud
Futures, or contracts to buy or sell a commodity at a certain price at a set time, are used to minimize risk to companies who need certain resources, such as copper, oil, gold, wheat, sugar, iron ore, etc. With the growing online market for futures trading, futures fraud has become an increasingly prevalent problem. These types of fraud include:
Unauthorized trading: This is the act of someone making trades on your account without your authorization.
Churning: When you authorize someone to trade on your account, you expect them to act in your best interest. Churning is the act of trading on an investor’s account solely to gain profit from commission rather than to gain a return for you.
Unlawful nondisclosure: As an investor, you have a right to certain information. If this information is withheld, it constitutes nondisclosure. For example, failure to tell you the risk of an investment is considered fraud.
Misrepresentation: Like nondisclosure, except that this involves false statements about an investment rather than simply withholding information.
Misappropriation: The act of using your investment for any purpose other than the one you authorize. For example, if you authorize someone to use assets to purchase futures and they spend it on real estate, that would be considered misappropriation.
Wash sales: Wash sales, noncompetitive trading, and accommodation trading are defined as selling a commodity or derivative for less than its current selling value. This is often done to fraudulently reduce taxes owed on capital gains.
Bucketing: The act of confirming an order without actually executing it. Brokers may use this to pocket extra profit due to price fluctuations.
This is far from a comprehensive list, of course. If you suspect you are dealing with fraudulent management or usage of your futures contracts, investments, or other derivatives, contact Hart & David for the litigation experience you need.
Other Litigation Matters
Fraud in trades and investments is not the only issue facing investors. Other possible litigations may include:
- Failure to supervise representative
- Breach of fiduciary duty
- Deceptive sales methods
- Use of misleading promotional information
- Breach of contract
Keen legal experience as well as a working knowledge in the trade of futures contracts and derivatives is vital to pursuing compensation for wronged investors.
Hart & David represents clients throughout Chicago and surrounding suburbs in commodities, futures, and derivatives trading disputes. Our attorneys can handle every aspect of dispute resolution, including litigation, arbitration, and mediation. We litigate against the following entities:
- Futures commission merchants (FCMs)
- Introducing brokers (IBs)
- Commodity pool operators (CPOs)
- Commodity trading advisors (CTAs)
- Agricultural trading option merchants (ATOMs)
- Any associated person (AP)
We employ a variety of litigation, arbitration, and mediation services to investors who have been wronged by these entities. To learn more or to receive a free consultation, contact Hart & David today.