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Investment Fraud

Dallas Investment Fraud Lawyers

More than 30 Years of Federal Criminal Defense Experience

Investment fraud can cause very significant financial losses and leave investors uncertain about where to turn for help. When an investment advisor, broker, financial professional, or company uses deceptive practices, misrepresents an investment, or fails to disclose important information, you may have legal options for seeking recovery. The Law Office of Patrick J. McLain, PLLC represents clients in Dallas who have suffered losses due to suspected investment fraud. Our team can investigate the circumstances surrounding your losses, identify potentially responsible parties, and pursue the compensation you may be entitled to under applicable law.

Call us today at (214) 238-9392 or contact us online to schedule a consultation with our investment fraud lawyer in Dallas.

What is Investment Fraud?

Securities fraud, also known as investment fraud, often involves the promise of a high return rate on an investment with little risk. On the federal level, the Securities and Exchange Commission (SEC) protects investors through the federal Securities Act. In addition, the SSB, or Texas State Securities Board, also regulates the securities industry in our state.

The SEC and SSB are concerned with uncovering acts of deception regarding investments and stocks. Some of the more common illegal investment activities include:

Ponzi & Pyramid Schemes

Two of the most common types of investment fraud are Ponzi and pyramid schemes. A Ponzi scheme is a common type of investment fraud premised on returning a high rate of return to current investors by recruiting new investors to contribute funds. The creator or creators of the Ponzi scheme need to recruit new investors to create the facade of high return rates.

Similar to a Ponzi scheme, a pyramid scheme is premised on returning a high rate of return and recruiting new members to support the high return rate. Unlike a Ponzi scheme, however, members in a pyramid scheme actively recruit new investors. The members expand significant effort to recruit new members through marketing programs. In a Ponzi scheme, members in the scheme do not recruit other investors; instead, these members believe the high rate of return is based on their investments and not recruiting other investors.

Common Warning Signs of These Schemes

In the end, Ponzi and pyramid schemes eventually collapse when new investors cannot be recruited or when a significant number of investors try to cash out their investments. Common warning signs of these schemes include:

  • High investment returns with little risk
  • Unregistered investments
  • Consistent high return rates
  • Unlicensed brokers
  • Lack of paperwork
  • Not receiving payments
  • Difficulty cashing out one’s investment

Who Investigates and Prosecutes Investment Fraud in Texas

Investment fraud cases rarely start and end with a single agency. In Dallas, an investigation can involve the SEC, the Texas State Securities Board, the FBI, and the U.S. Attorney's Office, sometimes all at once. The SEC generally pursues civil enforcement action, seeking penalties like disgorgement, fines, and industry bars. The Department of Justice, working through the FBI and U.S. Attorney, handles the criminal side, where a conviction can carry federal prison time.
It is common for a civil SEC inquiry to run alongside a parallel criminal investigation. A subpoena or an SEC letter of inquiry does not mean charges are inevitable, but it does mean the matter is being taken seriously by regulators, and it is the point at which legal counsel should be involved. Waiting until an indictment is filed narrows the options available to build a defense.

Potential Penalties for Investment Fraud Convictions

Federal investment fraud charges are typically prosecuted under securities fraud, wire fraud, or mail fraud statutes, and the penalties reflect the scale of the alleged scheme. A conviction can result in:
  • Up to 20 years in federal prison per count under securities fraud statutes
  • Substantial fines, often calculated against the amount of investor losses
  • Court-ordered restitution to victims
  • Forfeiture of assets connected to the alleged scheme
  • A permanent bar from working in the securities industry
Sentencing in federal investment fraud cases is guided by the U.S. Sentencing Guidelines, which weigh factors such as the dollar amount involved, the number of victims, and the defendant's role in the scheme. These factors make early, strategic legal representation critical to the outcome of a case.

How Our Firm Builds a Defense Strategy

Every investment fraud allegation is different, and the right defense depends on the specific facts, the evidence the government has gathered, and the stage of the case. At the Law Office of Patrick J. McLain, PLLC, defense strategies for Dallas clients may include:
  • Challenging whether the government can prove intent to defraud
  • Scrutinizing how evidence was gathered, including subpoenaed records and wiretaps
  • Identifying legitimate business decisions that regulators have mischaracterized as fraud
  • Negotiating with the SEC or DOJ before charges are filed
  • Presenting mitigating factors to reduce exposure at sentencing
Patrick J. McLain has spent more than 30 years handling federal criminal matters, giving him direct insight into how Dallas prosecutors and federal judges evaluate these cases.

Why Dallas Clients Choose Patrick J. McLain, PLLC

Investment fraud allegations can threaten a career, personal assets, and reputation long before a case ever reaches trial. Clients choose the Law Office of Patrick J. McLain, PLLC because of:
  • Three decades of focused federal and state criminal defense experience
  • A background as a former Marine Corps officer, bringing discipline and preparation to every case
  • Direct, hands-on attention rather than case files handed off to junior staff
  • A track record of guiding clients through SEC inquiries, grand jury proceedings, and federal trials
  • Confidential case evaluations available 24 hours a day, 7 days a week

Frequently Asked Questions About Investment Fraud 

What is the difference between investment fraud and securities fraud?

The terms are often used interchangeably. Investment fraud is the broader term for any scheme that deceives investors, while securities fraud specifically refers to fraud involving stocks, bonds, or other regulated securities. Most investment fraud cases in Dallas are charged as securities fraud, wire fraud, or mail fraud under federal law.

I received a letter from the SEC. Does that mean I am being charged with a crime?

Not necessarily. An SEC letter of inquiry or subpoena typically starts a civil investigation, not a criminal case. However, SEC investigations can run parallel to criminal investigations by the FBI or U.S. Attorney's Office, so it is important to speak with a defense attorney before responding.

Can investment fraud be charged at both the state and federal level?

Yes. The Texas State Securities Board can pursue state-level securities violations, while the SEC and DOJ handle federal charges. In some cases, conduct can lead to both state and federal proceedings.
What should I do if I am contacted by the FBI about an investment scheme? Do not answer questions or provide documents before speaking with an attorney. Statements made during an initial FBI interview are often used later in a prosecution, even if no charges have been filed yet.

How long do federal investment fraud investigations typically take?

Federal investigations can take months or years, depending on the complexity of the alleged scheme, the number of victims, and how many agencies are involved. Working with an attorney early can help you understand where your case stands and what to expect next.

Will I go to prison if convicted of investment fraud?

It depends on the specific charges, the amount of investor losses, and your criminal history. Federal sentencing guidelines weigh these factors, and an experienced defense attorney can work to reduce exposure through negotiation, mitigation, or trial defense.

Contact Our Dallas Investment Fraud Defense Attorney Today

If you are involved in an investment fraud scheme, it is important to contact an experienced Dallas investment fraud attorney. At the Law Office of Patrick J. McLain, PLLC, Patrick J. McLain is an experienced stock and securities fraud lawyer who can help protect your legal rights.

Contact our firm to schedule a complimentary and confidential case evaluation today with our  Dallas investment fraud lawyer. Call our office 24 hours a day, 7 days a week at (214) 238-9392.

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  • Former Federal Prosecutor & Military Judge
    Attorney Patrick J. McLain's years of experience across the aisle provide him with a unique perspective.
  • Over 3,500 Cases Successfully Handled
    Patrick J. McLain has helped thousands secure a better future with tenacious representation.
  • Our Firm is Top-Rated & Award-Winning
    Attorney Patrick J. McLain is widely respected by his peers & clients as seen by his numerous accolades.
  • Over Two Decades in the U.S. Marine Corps
    Attorney Patrick J. McLain tries all of his cases with integrity and unparalleled work ethic.