Assets Subject to Forgery, Conversion & Theft - Transcript

Financial fraud can take many forms, but some of the most damaging to investors involve forgery, conversion, or outright theft. Each of these acts can result in significant losses, especially for those who rely on trusted financial professionals to manage their accounts. At Malecki Law, our New York investment loss lawyers have seen firsthand how devastating these actions can be and work to recover funds for victims across the country. 

Though these terms are often used interchangeably, they each have a distinct legal meaning and can arise under different circumstances.

Forgery involves the falsification of a document, signature, or written instrument with the intent to deceive or defraud. In an investment setting, this may include forging a client’s signature to authorize a transaction or create a new account. The forged document is typically used to access or move assets without the client’s knowledge.

Conversion refers to the unauthorized use or control of someone else's property. In financial services, conversion can occur when a broker or advisor takes client funds and uses them for personal benefit or redirects them to accounts or investments without permission. Even if the funds are not stolen outright, misusing them can breach duties owed to the investor.

Theft is the unlawful taking of another person’s property with the intent to permanently deprive them of it. In the investment context, this could involve a financial professional stealing cash, transferring securities without authorization, or siphoning assets into undisclosed accounts.

While each of these offenses can stand alone, they may also occur together in a single fraudulent scheme. For example, a broker may forge a signature, convert funds to their own use, and effectively steal assets from a client’s account.

Certain asset types are more vulnerable to forgery, conversion, and theft due to their liquidity, lack of oversight, or ease of transfer. Cash equivalents and highly liquid assets such as money market funds, certificates of deposit, and short-term bonds are particularly attractive to bad actors because they can be quickly accessed and moved.

Securities like stocks, mutual funds, and exchange-traded funds (ETFs) can also be subject to these forms of misconduct, especially if the investor has granted limited or full discretionary trading authority. In these situations, an unscrupulous advisor can abuse their access to perform unauthorized trades or withdrawals.

Retirement accounts, especially IRAs and 401(k)s (which are both typically tax-deferred accounts), may also be targeted due to the long-term nature of the investment. Investors often pay less attention to these accounts on a daily basis, giving dishonest professionals an opportunity to act without immediate detection.

Alternative investments—such as private placements, non-traded REITs, or annuities—may be subject to abuse because they are less transparent and less frequently reviewed by the investor. A financial advisor could misrepresent the risks, forge documentation to approve the transaction or convert funds from more traditional accounts to purchase inappropriate products.

If you suspect that your investments have been affected by forgery, conversion, or theft, it is critical to act quickly. Malecki Law’s investment loss lawyers have represented countless clients in claims against brokers, advisors, and financial firms who failed to uphold their duties.

We conduct thorough reviews of account statements, correspondence, trading history, and internal communications to identify any signs of misconduct. Whether it involves unauthorized trades, missing assets, or falsified documents, our team knows what to look for and how to build a strong case.

We also understand that these cases are often emotional and personal. Investors may feel betrayed by someone they trusted for years. Our attorneys are compassionate advocates who work to help you recover not only your financial losses but your peace of mind.

Malecki Law represents clients in FINRA arbitration, court proceedings, and settlement negotiations. We will evaluate whether a forgery, conversion, or theft occurred, determine who is liable, and pursue all available legal remedies.

How do I know if my signature was forged on a financial document?
You may receive statements showing transactions you don’t recognize or notices of new accounts you never opened. If something seems suspicious, request copies of all signed documents from your financial firm and compare them to your genuine signature.

What should I do if my financial advisor used my funds without permission?
You should immediately notify the firm’s compliance department and consult with an attorney. Any delay in reporting can weaken your case. Malecki Law’s New York investment loss lawyers can help you understand your rights and start the recovery process.

Can a brokerage firm be held responsible for an advisor’s misconduct?
Yes. Firms have a duty to supervise their employees and can be held liable for losses caused by forgery, conversion, or theft. That includes situations where the firm failed to notice red flags or ignored warnings from the investor.

When your savings have been compromised, you need experienced attorneys on your side. Malecki Law’s New York investment loss lawyers are dedicated to uncovering financial misconduct and recovering what was taken. If you believe you’ve been the victim of forgery, conversion, or theft, don’t wait to seek help. Contact us today for a confidential consultation by calling (212) 943-1233 or emailing jenice@maleckilaw.com.