Investment Fraud FAQs: Straight Answers for Defrauded Investors
Nearly every defrauded investor who calls the firm asks the same direct questions: Can I still sue? Who can I sue? What can I actually get back? What will it cost? This page answers them plainly, drawn from nearly two decades of representing defrauded oil and gas investors nationwide. It is general information, not legal advice for your situation — that requires a conversation.
Getting Started
Preserve everything — agreements, emails, texts, statements, wire records, promotional materials — and stop sending money, including any payment pitched as the way to “unlock” or “recover” your investment. Then have the facts reviewed promptly: legal deadlines run whether or not you’ve decided what to do, and assets are easiest to reach early.
Three things make a first conversation dramatically more productive: the documents you sent and received about the investment; a chronology of events — effectively a diary of each contact with the company’s representatives, when it happened, and what was represented (this is very important); and contact information for any other investors you know in the same deal. Fellow investors matter twice over: they corroborate the story, and fraud that touched you almost always touched others.
The firm represents victims of investment fraud in civil litigation — with a practice concentrated in oil and gas investment fraud (fake and misrepresented drilling programs, oversold interests, royalty schemes), securities and private placement fraud, Ponzi schemes, and business and commercial fraud.
Your Legal Rights
No. The Texas Securities Act allows a defrauded investor to sue not only the company, but also the salesman, the “closer,” and the “control person” of the company. The closer is the person who contacts the investor after the salesman’s presentation to close the deal and obtain your money. The control person is usually the majority owner — the person with the power to direct the company’s management or control the transactions of the project. This matters enormously in practice, because the company itself is often empty by the time the fraud is discovered; the recovery frequently comes from the individuals behind it.
Generally, the Texas Securities Act allows the investor to recover the total amount invested, less any revenue received, plus interest, court costs, and reasonable attorney’s fees. Additionally, where the facts support a fraud claim, an investor may also seek exemplary damages — damages designed to penalize defendants for outrageous and malicious conduct.
There are time limits on every claim, and they are shorter than most investors assume. As a general rule, an investor is safest acting within three years of the investment; four years is possible in some circumstances. There are also exceptions under which the clock runs from when the fraud was or should have been discovered rather than from the investment date. Because the exceptions are fact-specific, the filing-deadline analysis should be one of the first things done, not the last.
Yes. Criminal prosecution and regulatory enforcement run parallel to your civil claims — they punish the wrongdoer, and occasionally produce restitution, but they exist to enforce the law, not to make you whole. Reporting the fraud is the right thing to do and does not limit your own recovery. Your civil case is its own track, on its own deadlines.
How a Case Actually Proceeds
First, the firm reviews your information to determine whether it supports a lawsuit. If it does, you and the firm enter into an attorney-client agreement, and a demand letter goes to every potential defendant: notice of representation, the legal basis for their liability, and a demand to return what you are entitled to — with fair warning to you that such letters usually go unanswered. When it goes unanswered, the lawsuit is filed. The claims most often made are violations of the Texas Securities Act, fraud and fraud in the inducement, breach of contract, breach of fiduciary duty, and requests for exemplary damages, attorney’s fees, and costs.
Discovery — the formal process of making the defendants show their hand: document production, written questions, requests to admit or deny key facts, and depositions of witnesses. After discovery, most cases are referred to mediation, where many are resolved. Cases that don’t settle proceed to trial. In the firm’s experience, thorough discovery is where fraud cases are won: it is where the money trail, and the misrepresentations, stop being your word against theirs.
No. It is unethical for a lawyer to make any type of guarantee in a case — and an investor should be wary of anyone who offers one. What the firm works to secure is a judgment against every liable party — the company, the salesman, the closer, and the control person — because a judgment against those parties allows pursuit of their assets under Texas law. The goal is not just winning on paper; it is positioning the case so the judgment can actually be collected.
“No lawyer can ethically guarantee you an outcome — and you should walk away from anyone who does. What I can tell you is how the money gets recovered: a judgment against everyone the law makes responsible, and the persistence to collect on it.”
— Mark A. Alexander, Founding Attorney
Fees and Practical Questions
In nearly all cases, the firm works on a strict hourly basis, with a retainer. On rare occasions the firm will take a case on a hybrid fee structure, reducing its hourly rate in exchange for a percentage of the recovery. Whether a hybrid arrangement is available depends on the case, and fees are always set out in a written agreement before the representation begins.
Written misrepresentations — the false statements in offering documents, emails, and marketing materials; financial documentation showing the money’s path — bank records, wire receipts, investment statements; your chronology of communications; other victims’ accounts; and, where needed, expert analysis tracing assets and calculating damages. Most investors have more usable evidence than they realize; the chronology and the paper trail do most of the work.
Often, yes. Recovery does not depend on the fraudster’s cooperation or presence. Depending on the facts, the avenues include asset investigation to locate what was hidden, fraudulent transfer claims to recover money moved to family members and associated entities, and claims against third parties who enabled the scheme. Disappearing is a tactic; it is not a defense to a judgment.
Start with the firm’s guide to how investors recover money after investment fraud, which walks through every legal avenue, honest timelines, and what recovery realistically depends on. For scheme-specific questions, see the pages on Ponzi schemes, working interest and royalty fraud, and oil and gas securities fraud.
Contact Mark A. Alexander, P.C.
We welcome the opportunity to discuss your legal issue.
Mark A. Alexander, P.C.
The Gild
8150 North Central Expressway, 10th Floor
Dallas, Texas 75206
Phone: (972) 544-6968
Fax: (972) 421-1500
Contacting us does not create an attorney-client relationship. Please do not send confidential or time-sensitive information through this form.
Attorney Advertising. Past results do not guarantee future outcomes.