Commodities Fraud

What is Commodities Fraud?

Commodities fraud occurs during the buying or selling of commodities, and falls into four main categories:

  1. Agriculture (corn, soybeans, and rice)
  2. Energy (crude oil, heating oil, and gasoline)
  3. Livestock and meat
  4. Metals (gold, silver, and platinum)

Commodities sell on a futures exchange and are regulated by the Commodities Futures Trading Commission (CFTC), an independent federal agency tasked with protecting consumers from fraud and abusive practices. Commodities fraud can be as simple as a broker misrepresenting the risk of an investment, or as elaborate as price fixing. It could involve charging investors excessive fees. The CFTC warns consumers to beware of the following:

  • Predictions or guarantees of large profits
  • Get-rich quick schemes
  • Promises of little-to-no financial risk
  • Unsolicited phone calls about investing
  • Requests to send cash or transfer money immediately

Anybody can find themselves a victim of commodities fraud

Commodities trading can be very complex, and involves more speculation and volatility than the stock market. Even if a stock broker or advisor assures you commodities are a safe bet, you must be wary. Understand the risk of your commodity investments and protect yourself against “too good to be true” claims. Stay informed about the various types of fraud putting investors at risk

The following are examples of commodities fraud

  • Unsuitable recommendation — telling an investor to purchase, sell or exchange a commodity unsuitable for their financial needs
  • Misuse or misappropriation of funds — spending investor money on things not agreed on
  • Misrepresentation — knowingly giving a client inaccurate, incomplete, or biased information, or withholding material facts
  • Churning — a broker's excessive trading to generate commissions

If you have lost money, what can you do?

Fortunately, you may be able to recover some or all of your losses. A commodities fraud attorney should be familiar with current state and federal laws. They should also advise you on legal options appropriate to your situation. Sokolove Law offers a FREE, no-obligation legal consultation for those who believe they were a victim of commodities fraud. Call  us today and learn more about how we might be able to help you recover your losses.

Commodities Fraud Case Types

Author:Sokolove Law Team
Sokolove Law Team

Contributing Authors

The Sokolove Law Content Team is made up of writers, editors, and journalists. We work with case managers and attorneys to keep site information up to date and accurate. Our site has a wealth of resources available for victims of wrongdoing and their families.

Last modified: September 10, 2020