Texas Investment Fraud Attorney: Fighting for the Lone Star State’s Investors

Protecting Texas Investors from Securities Fraud

When a Houston energy executive invested $1.4 million in what was described as a “revolutionary shale extraction technology” with “proven reserves” in the Permian Basin, he trusted his financial advisor’s industry expertise. Within fourteen months, his investment had lost 85% of its value – not due to fluctuating oil prices but because the venture’s assets and technology were substantially misrepresented. The advisor had concealed significant conflicts of interest while collecting substantial placement fees.

This Texas energy professional represents just one of hundreds of Lone Star State investors victimized by securities fraud annually and stories we hear frequently. Through specialized FINRA arbitration and litigation, Patil Law, P.C. would seek to recover this individual’s losses plus interest—restoring his financial security when it seemed irretrievably lost.

Since our founding, Patil Law, P.C. has recovered over $25 million for clients nationwide, with significant recoveries for Texas investors from Houston to Dallas-Fort Worth and throughout the state. Our firm brings specialized expertise in securities law, FINRA regulations, and Texas’ robust investor protection statutes that residents need when facing devastating financial losses.

If you’ve experienced investment losses due to broker misconduct or securities fraud in Texas, call 800-950-6553 today for a confidential, no-obligation consultation.

Investment Fraud in the Lone Star State: Understanding the Texas Landscape

The Texas State Securities Board reported a 53% increase in investment fraud complaints since 2021, with metropolitan areas like Houston, Dallas, and Austin accounting for nearly 70% of reported cases. This troubling trend coincides with Texas’ booming economy and population growth, creating fertile ground for investment fraudsters.

Why Texas Investors Face Distinctive Vulnerabilities

Texas’ economic profile and cultural characteristics create unique conditions for investment fraudsters. Several factors make Texas investors particularly vulnerable:

1. Energy Industry Prominence: Texas’ position as an energy powerhouse creates opportunities for sophisticated oil and gas investment scams targeting those familiar with the industry.
2. Real Estate Boom: Texas’ rapidly growing property markets in Austin, Houston, and Dallas-Fort Worth have spawned numerous fraudulent development schemes promising outsized returns.
3. Entrepreneur Culture: Texas’ strong entrepreneurial spirit makes investors receptive to “ground-floor opportunities” in startup ventures that may be misrepresented.
4. Wealth Concentration: With Texas’ substantial growth in high-net-worth individuals, predatory advisors target affluent communities with complex investment schemes.
5. Diverse Community Ties: Texas’ multicultural population has led to an increase in affinity fraud, where scammers exploit trust within specific ethnic, religious, or professional groups.

Common Types of Investment Fraud Affecting Texas Investors

Our Texas investment fraud attorneys regularly handle cases involving sophisticated schemes that victimize investors across the state:

Oil and Gas Investment Fraud

Texas’ position as a global energy center makes it ground zero for oil and gas investment fraud. These schemes typically involve:

• Fraudulent drilling programs with exaggerated production projections
• Misrepresented ownership interests in wells or leases
• Inflated valuations of reserves or extraction technology
• Non-existent or vastly exaggerated production capabilities
• Undisclosed risks and conflicts of interest

Case Example: A Dallas physician invested $850,000 in oil and gas limited partnerships based on misrepresented production capabilities. In this situation, Patil Law would seek to secure recovery through FINRA arbitration against the recommending broker and their firm.

Real Estate Investment Fraud

Texas’ dynamic property market creates fertile ground for investment scams promising exceptional returns through real estate ventures. Common schemes include:

• Fraudulent pre-construction developments in rapidly growing areas
• House-flipping programs with hidden fees and unrealistic projections
• Syndicated real estate investments with misrepresented risks
• Land banking schemes selling worthless parcels at inflated prices
• Non-traded REITs with undisclosed illiquidity and conflicts

Case Example: An Austin broker sold limited partnership interests in a San Antonio apartment complex development to 32 local investors, claiming “guaranteed” 15% returns. The project failed due to undisclosed permitting issues. In this scenario, Patil Law would fight to recover through combined FINRA arbitration and litigation against the enabling brokerage firm.

Ponzi and Pyramid Schemes

In 2023, Texas authorities shut down a $112 million Ponzi scheme operating from offices in Houston and Dallas that targeted over 600 Texas investors. The scheme promised 12-18% “consistent” returns from a purported private equity strategy that never existed.

Ponzi schemes often exploit affinity relationships within Texas’ tight-knit communities, including:

• Energy industry professionals in Houston and Midland
• Religious congregations throughout Dallas-Fort Worth
• Ethnic communities in San Antonio and El Paso
• Professional networks in healthcare and technology
• University alumni networks across the state

Case Example: A Plano investment manager targeting the local Mexican-American community was exposed as operating a $22 million Ponzi scheme. If presented with this situation, Patil Law would fight to recover for affected investors through FINRA arbitration and civil litigation against enabling financial institutions.

Private Placement Fraud

Texas’ entrepreneurial culture creates opportunities for fraudulent private placement offerings, particularly in:

• Technology startups with misrepresented capabilities
• Medical device companies with exaggerated regulatory prospects
• Energy ventures with fictitious proprietary technology
• Real estate development projects with undisclosed obstacles
• Alternative investments with hidden risks and fees

Case Example: A Fort Worth financial advisor convinced clients to invest in a private placement for a Texas biotech company, concealing significant regulatory hurdles. In this situation, Patil Law would look to recover losses through FINRA arbitration based on material misrepresentation and failure to conduct due diligence.

Unsuitable Investment Recommendations

Texas regulations require investment professionals to recommend only investments that align with their clients’ financial objectives, risk tolerance, time horizon, and investment experience. Unsuitable investment recommendations we frequently encounter include:

• High-commission variable annuities sold to elderly San Antonio residents
• Leveraged ETFs placed in conservative El Paso retirement accounts
• Illiquid private placements marketed to Houston investors with near-term cash needs
• High-risk options strategies recommended for Austin retirees seeking income
• Speculative energy stocks pushed on risk-averse Lubbock investors

Case Example: A retired Corpus Christi school administrator was placed in high-commission, illiquid alternative investments despite clearly stated needs for portfolio liquidity. In this scenario, Patil Law would aim to secure a settlement through FINRA arbitration based on unsuitable investment recommendations.

Churning and Excessive Trading

When brokers generate commissions by frequently buying and selling securities without regard for their clients’ best interests, they engage in churning—a serious violation of both Texas securities regulations and FINRA rules.

Warning signs of churning include:

• High turnover ratio in your account
• Frequent buying and selling of the same security
• Substantial transaction costs compared to account value
• Similar securities repeatedly bought and sold
• Predominance of commission-based rather than fee-based accounts

Case Example: An Arlington business owner discovered her broker had executed over 190 transactions in a single year, generating $62,000 in commissions while her account lost value. In this situation, our investment fraud attorneys experienced in Texas secured full recovery of commissions plus market opportunity losses through FINRA arbitration.

Texas Securities Laws and Investor Protection

The Texas Securities Act

The Texas Securities Act (Vernon’s Texas Civil Statutes, Article 581-1 et seq.) provides some of the nation’s strongest protections for investors, including:

• Anti-fraud provisions prohibiting misrepresentations (Article 581-33)
• Registration requirements for securities and investment professionals
• Fiduciary duty standards for investment advisors
• Civil liability provisions for securities violations
• Administrative enforcement mechanisms through the Texas State Securities Board

As experienced securities attorneys familiar with Texas law, we leverage these state-specific protections alongside federal securities laws to maximize recovery potential for our clients.

The Texas State Securities Board

The Texas State Securities Board (TSSB) is one of the oldest and most active state securities regulators in the nation. Founded in 1957, the TSSB brings enforcement actions against fraudulent investment schemes and provides valuable resources for Texas investors.

Our investment fraud attorneys work closely with the TSSB when appropriate to coordinate recovery efforts and ensure fraudsters are held accountable through both civil remedies and regulatory enforcement.

The FINRA Arbitration Process for Texas Investors

Most investment agreements contain mandatory arbitration clauses requiring disputes to be resolved through FINRA rather than Texas courts. Understanding this specialized forum is essential to investment recovery:

The FINRA Arbitration Process for Texas Investors:

1. Case Evaluation (Pre-Filing): Our Texas investment fraud attorneys thoroughly analyze account statements, communications, and transaction history to identify actionable misconduct.

2. Statement of Claim: We prepare and file a comprehensive Statement of Claim detailing the specific misconduct, violations of securities laws and regulations, and quantifying damages.

3. Respondent’s Answer: The broker and firm respond to allegations, typically denying responsibility and asserting various defenses.

4. Arbitrator Selection: Unlike court cases with assigned judges, FINRA allows parties to rank and strike potential arbitrators from a computer-generated list.

5. Discovery: The exchange of relevant documents and information between parties, including:

• Account statements and confirmations
• New account forms and investment objectives
• Communications between broker and client
• Internal compliance reviews
• Due diligence and training materials

6. Pre-hearing Conferences: Procedural matters are addressed, including scheduling, witness lists, and evidentiary issues.

7. Evidentiary Hearing: Similar to a trial but less formal, the hearing allows presentation of testimony and evidence before the arbitration panel.

8. Award: FINRA arbitrators issue a binding decision that is difficult to appeal or overturn, making initial case presentation crucial.

Strategic Advantages of FINRA Arbitration for Texas Investors:

• Typically faster resolution than Texas’ crowded court system
• Lower formality reduces procedural hurdles
• Industry arbitrators understand complex securities issues
• Confidential proceedings protect investor privacy
• Limited appeals process provides finality
• Potentially broader equitable remedies

How a Texas Investment Fraud Attorney Maximizes Recovery

Expert Investigation and Case Building

At Patil Law, our Texas investment fraud attorneys utilize sophisticated forensic analysis techniques to uncover evidence of misconduct:

• Expert securities trading pattern analysis
• Comprehensive account performance benchmarking
• Document authentication and verification
• Witness identification and interview strategies
• Industry standard-of-care evaluation

This thorough investigation builds the foundation for successful recovery.

Strategic Damage Calculation

Quantifying investment losses requires specialized expertise. We employ multiple damage calculation methodologies to maximize recovery potential:

• Net Out-of-Pocket: The difference between the amount invested and the amount received
• Well-Managed Account: Comparing actual performance to appropriately benchmarked investments
• Market-Adjusted Damages: Accounting for market conditions during the relevant period
• Rescission and Rescissory Damages: Returning parties to their pre-investment positions
• Trading Losses Plus Commissions: Particularly effective in churning cases

Expert Testimony Coordination

Complex investment fraud cases often require specialized expert testimony to establish liability and damages. Our Texas investment fraud lawyers coordinate with recognized experts in:

• Securities trading practices
• Portfolio management standards
• Compliance and supervision requirements
• Financial product suitability analysis
• Oil and gas industry valuation techniques
• Forensic accounting and damage calculation

Settlement Negotiation Excellence

While prepared to pursue claims through final hearing, our Texas investment fraud attorneys have secured millions in pre-hearing settlements through strategic negotiation techniques:

• Mediation preparation and presentation
• Timing leverage points throughout arbitration
• Strategic use of dispositive motions
• Liability and damages bifurcation when advantageous
• Confidentiality and regulatory reporting considerations

Meet Attorney Chetan Patil: The Premier Investment Fraud Advocate

As founder and Managing Partner of Patil Law, P.C., Chetan Patil brings unique qualifications to investment fraud cases in Texas:

Insider Perspective

Before representing defrauded investors, Mr. Patil served as senior litigation counsel at Cetera Financial Group, one of the nation’s largest brokerage firms managing over $115 billion in assets. This insider perspective provides Patil Law clients with:

• Deep understanding of brokerage firm defense strategies
• Knowledge of internal compliance protocols and breakdowns
• Insight into damage control mechanisms at major firms
• Ability to anticipate and counter procedural maneuvers
• Strategic leverage points for settlement negotiations

Comprehensive Securities Litigation Experience

Mr. Patil has handled over a thousand securities cases nationwide, including:

• FINRA arbitrations for investors and industry participants
• Federal securities litigation under various Acts
• State securities law claims across multiple jurisdictions
• Class action securities cases involving complex instruments
• Regulatory enforcement proceedings

This breadth of experience ensures Texas investors benefit from sophisticated representation tailored to their specific needs.

Special Focus: Oil and Gas Investment Fraud in Texas

Texas’ prominent position in the energy industry makes oil and gas investment fraud particularly common in the state. Unscrupulous promoters often target Texas investors with fraudulent oil and gas schemes, capitalizing on local interest in the industry and promising extraordinary returns.

Common oil and gas fraud schemes in Texas include:

• Fraudulent Drilling Programs: Projects with nonexistent or grossly exaggerated production potential
• Working Interest Scams: Misrepresented ownership interests in wells or leases
• Reserve Valuation Fraud: Wildly inflated estimates of recoverable resources
• Technology Schemes: Claims about revolutionary extraction technology that doesn’t exist
• Pipeline or Infrastructure Fraud: Misrepresented ownership or rights to energy infrastructure

Our Texas investment fraud attorneys have specific experience with oil and gas investment fraud cases and understand the complex technical and regulatory issues involved. We work diligently to help victims of these schemes recover their losses and hold the perpetrators accountable.

Warning Signs of Investment Fraud for Texas Investors

Texas investors should watch for these red flags that often indicate investment fraud:

• Guaranteed Returns: No legitimate investment offers guaranteed profits
• Unregistered Investments: Check if securities are registered with the Texas State Securities Board or SEC
• Pressure Tactics: Legitimate opportunities don’t require immediate decisions
• Unverifiable Track Records: Past performance claims should be independently verifiable
• Inconsistent Documentation: Account statements should match transaction confirmations
• Complex Strategies: If you can’t understand it, you shouldn’t invest in it
• Exclusive Opportunities: True investment opportunities rarely require secrecy
• Direct Payment Requests: Legitimate investments don’t require checks made out to individuals

Frequently Asked Questions About Investment Fraud in Texas

How do I know if I’ve been victimized by investment fraud?

Investment fraud isn’t always obvious. Warning signs include unexplained account losses, unauthorized transactions, investments that don’t match your stated objectives, excessive trading, and difficulty accessing your funds. Our Texas investment fraud attorneys offer complimentary portfolio reviews to identify potential misconduct.

What is the statute of limitations for investment fraud claims in Texas?

Under Texas law, most investment fraud claims must be filed within three to five years, depending on the specific claim and when the fraud was discovered or should have reasonably been discovered. However, FINRA arbitration rules generally allow claims within six years of the event. These deadlines can be complicated by continuing violations and discovery rules—consult with a Texas investment fraud lawyer immediately to protect your rights.

How much does it cost to hire a Texas investment fraud attorney?

Patil Law represents Texas investment fraud victims on a contingency fee basis. You pay no upfront fees, and we only collect payment if we successfully recover money for you. Our fee is a percentage of the recovery, aligning our interests with maximizing your compensation.

What makes Patil Law different from other securities attorneys?

Three factors distinguish Patil Law’s Texas investment fraud practice:

1. Insider Perspective: Our founder’s experience as senior litigation counsel for a major brokerage firm provides unique strategic advantages in FINRA arbitration.
2. Specialized Focus: Unlike general practice firms, we concentrate exclusively on investment fraud and securities litigation, bringing deeper expertise to complex cases.
3. Comprehensive Approach: We pursue all available recovery avenues, including FINRA arbitration, civil litigation against enabling parties, and coordination with regulatory enforcement when appropriate.

Can I recover investment losses due to market conditions?

Generally, market losses alone aren’t recoverable. However, if your Texas financial advisor placed you in unsuitable investments given your risk tolerance, failed to diversify properly, or misrepresented the risks involved, you may have valid claims despite market downturns. Our Texas investment fraud attorneys can evaluate whether your losses resulted from actionable misconduct rather than legitimate market risk.

Serving Investors Throughout Texas

Patil Law represents investment fraud victims across the Lone Star State, including:

• Houston
• Dallas
• San Antonio
• Austin
• Fort Worth
• El Paso
• Arlington
• Corpus Christi
• Plano
• Lubbock
• Laredo
• Irving
• Frisco
• McAllen
• Waco
• Midland
• Odessa
• Beaumont
• Sugar Land
• College Station
• The Woodlands
• San Angelo
• Tyler
• Round Rock
• Pearland
• And all surrounding communities

Don’t Wait to Protect Your Financial Future

If you’ve suffered significant investment losses in Texas, immediate action is essential. FINRA claims are subject to strict time limitations, and evidence can become more difficult to obtain with passing time.

According to FINRA statistics, investors who obtain qualified legal representation recover significantly more than those who represent themselves in securities arbitration. Don’t face the financial industry alone—our Texas investment fraud attorneys have the specialized knowledge and experience to navigate this complex process and maximize your recovery.

Contact Patil Law, P.C. today at 800-950-6553 for a confidential consultation with an experienced Texas investment fraud lawyer. We’ll evaluate your case, explain your legal options, and develop a strategy to help recover your investment losses.

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