First, stop further losses
- Don't send more money, including for "processing fees," "taxes," or capital calls you can't verify.
- Don't sign a release, waiver, or settlement without a lawyer's review.
- Ignore anyone offering to recover your money for an upfront fee.
Investment loss recovery paths
| Path | When it may apply | Who decides |
|---|---|---|
| FINRA arbitration | A FINRA member firm or registered rep sold or recommended the investment, including "selling away" | FINRA arbitrators |
| Lawsuit or private arbitration | Misrepresentation, omission, or unregistered sale by the issuer, sponsor, or sellers | Court or arbitration forum named in your documents |
| Rescission claim | Sold without registration or valid exemption, or by an unregistered broker | Court or arbitration |
| Receivership claim | A court-appointed receiver controls the scheme's assets (e.g., StraightPath, Legend) | Receiver and court |
| Bankruptcy claim | The platform or fund filed for bankruptcy (e.g., Linqto) | Bankruptcy court |
| SEC Fair Fund / distribution | The SEC recovered money and set up a distribution | SEC / fund administrator |
Securities fraud recovery: who can be liable
- The issuer, fund, or SPV and its managers
- Individual salespeople and the people who controlled the operation
- A brokerage firm that employed the salesperson and failed to supervise them
- In some cases, others who materially assisted the sale
The brokerage-firm route is often the most practical source of recovery, because boiler-room operators frequently have few assets left by the time a case is filed. That's why checking every seller's BrokerCheck history matters even after the fact.
What evidence you'll need
- Offering documents and agreements
- Wire confirmations and bank statements
- Emails, texts, voicemails, and marketing materials
- Account statements, K-1s, capital-call notices
- Names, phone numbers, and CRD numbers of everyone involved
- A dated timeline in your own words
Act before the deadlines
Some deadlines are as short as one year. See the investment fraud statute of limitations.