CPAs on the Lookout for Securities Fraud

CPAs should be on the front line alerting their clients to securities fraud much more frequently than they presently do. Why do I say that? Because CPAs meet with their clients each year to prepare taxes and the common “client questionnaire” or “client organizer” which accountants routinely send to clients to fill out for tax preparation purposes ask the client if they have experienced any investment losses during the last year. The answer to this question serves as the perfect springboard for a discussion about these issues.

Securities and investment fraud is more rampant than ever. Ponzi schemes, the sale of RET’s (Real estate trusts), UIT’s (Unit investment trusts), and annuities to the elderly, and retirement portfolios that are overly exposed to volatile investments (such as stocks) are happening with increasing frequency. The statute of limitations is only three years for a claim based on the Indiana Securities Act. In the last 33 years of doing securities fraud work, I have received dozens of phone calls from clients who finally picked up the phone to call to talk to us about their investment losses, only to find out from us that the applicable statutes of limitations have expired and they called too late. Most people who experience securities fraud earn their money the hard way; they worked for it. A majority of these people are trusting, don’t have a close relationship with a lawyer, and fear the legal system in general. They have a tendency to blame themselves and want to stick their head in the sand. An accountant can do a great service to his clients to educate them that a remedy may exist for their losses, but they must pick up the phone and call us as soon as they discover what has happened.

We are hosting a seminar on Friday, June 27, 2014 that will help CPAs become the new super hero! This seminar is designed to alert CPAs of Indiana securities statutory and case law dealing with the creation of business entities. The course will also cover how a security is defined in Indiana. Plus, an explanation of situations in which a legal claim can be made to recover investment losses and exploring that process. If you are a CPA doing business in Indiana you do not want to miss this seminar, for your sake and your clients.