Futures Fraud and How To Avoid It

What is Futures Trading?

Futures trading is a formal agreement between parties to buy or sell a particular commodity at a certain price and at a specific point in time. The trading can be done with a number of different commodities: precious metals (i.e., silver or gold), petroleum products (i.e., crude oil and unleaded gas), foreign currency (i.e., Euros, Yen, or Deutschmarks), and agricultural products (i.e., corn, soybeans, or cattle). This type of trading is considered high-risk trading and is best suited for experienced investors who are willing to potentially risk losing their entire investment. For this reason, it’s always best to confer with a knowledgeable investor and do research before agreeing to any trading activity and exposing yourself to potential futures fraud.

What is Futures Fraud?

Futures fraud occurs when the party selling the commodity (e.g., commodity broker, financial advisor, or other third-party) engages in illegal activities or practices while trading futures to investors. Illegal activities often involved in futures fraud can include trading without the investor’s consent, false statements about the risk or value of the investment, withholding information from the investor on purpose (nondisclosure), trading on the investor account for commissions without regard for the investor, and using the investor’s assets for anything other than the stated purpose.

What Are Some Warning Signs of Futures Fraud?

The following are some common warning signs of potential futures fraud:

  • Investment opportunities that seem too good to be true and get-rich-quick schemes.
  • Promises or guarantees of large profits.
  • Assurances of little or no financial risk in the venture.
  • Claims of currency being traded in an “Interbank Market,” which can refer to a collection of transactions between banks and investment banks.
  • Unsolicited telephone calls about investment opportunities.
  • Requests for urgent transfers of cash to a recipient.


Do You Need A Futures Fraud Lawyer?

If you believe that you are the victim of futures fraud, reach out to Hanley Law and we can examine your case and determine the best course of action. Hanley Law has the experience required to help you receive the best possible outcome.

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