Some of these investment advisors and stockbrokers are clearly committing malpractice and breaching their fiduciary duties...
Logansport, IN (PRWEB) December 30, 2011
Scott Starr of the Indiana securities law firm of Starr, Austen & Miller, LLP, announces an investigation into securities fraud scams involving self-directed IRAs. A self-directed IRA is an IRA held by a trustee or custodian that permits an investment in a broader set of assets than is permitted by most IRA custodians.
Most IRA custodians are banks and broker-dealers that limit the holdings in IRA accounts to firm-approved stocks, bonds, mutual funds and CDs. Custodians and trustees for self-directed IRAs, however, may allow investors to invest retirement funds in other types of assets such as real estate, promissory notes, tax lien certificates, and private placement securities.
Fraud promoters who want to engage in Ponzi schemes or other fraudulent conduct may exploit self-directed IRAs because they allow investors to hold unregistered securities. Additionally, the custodians or trustees of these accounts have no responsibility to investigate the securities or the background of the promoter. Furthermore, self-directing IRAs do not typically require the trustee or custodian to keep accurate records or perform audits.
"Some of these investment advisors and stockbrokers are clearly committing malpractice and breaching their fiduciary duties in the way they are advising their clients to invest in their self directed retirement programs such as IRA’s and 401k’s," said investment fraud lawyer Scott Starr . “It is not uncommon for these individuals to place their clients in investments that are either too high risk, carry a time horizon that is too far in the future, or fail to properly diversify these portfolios."
The self-directed IRA custodial process gives the aura of protection for the investor but it is elusive. A few ways to avoid fraud with self-directed IRAs is to verify information in self-directed IRA account statements, avoid unsolicited investment offers, ask questions from the promoter, be mindful of “guaranteed” returns, and seek advice from a trained professional.
About the law firm:
The law firm of Starr Austen & Miller LLC has over 90 years of experience in securities and class action litigation. The firm has earned a national reputation among litigators by handling cases ranging from personal injury caused by exposure to toxic chemicals, truck accidents to mass and class actions against national brokerage firms for securities fraud.
Legal Resources for Impacted Investors:
If you have lost money in a fraudulent investment or scheme involving a self-directed IRA or a third-party custodian or trustee, or have information about one of these scams, you should contact Starr Austen & Miller LLC to learn more about the self-directed IRAs and report your experiences. Starr Austen & Miller's attorneys Mario Massillamany and Mark Fryman are available for direct live chat every Wednesday at 5pm.