Lost Money in a Fraudulent Investment? How Illinois Investors Can Recover Their Losses

Hoffman Estates-based Stoltmann Law Offices has been representing defrauded investors for more than twenty years.  If you’re an investor in Illinois who lost money in a fraudulent or deceptive investment, you’re not alone—and you’re not without options. Every year, hundreds of Illinois residents suffer devastating financial losses due to bad advice, misleading investment pitches, Ponzi schemes, or outright theft by so-called advisors and brokerage firms. These investors often find themselves searching online for answers to questions like:

• How do I sue my financial advisor in Illinois?
• Can I get my money back from a fraudulent investment?
• What is FINRA arbitration and how do I file a claim?
• Where can I find an investment fraud lawyer near me?

What Is Investment Fraud?

Investment fraud occurs when a person or firm uses deceit, manipulation, or misrepresentation to induce someone to invest money. The most common types of investment fraud seen in Illinois include:

• Ponzi schemes (where returns are paid from new investor money)
• Unregistered securities or “private placements” sold without proper disclosures
• Misrepresentation of risk (telling investors an investment is “safe” or “guaranteed” when it’s not)
• Unauthorized trading in a customer’s account
• Failure to diversify, leading to massive losses in a market downturn
• Selling unsuitable investments, particularly to retirees or those with limited financial sophistication

If you were told one thing and experienced another—especially if your investment dropped sharply in value while the broker made commissions—you may be a victim of investment fraud.

Can I Sue My Financial Advisor in Illinois?

Yes, and in many cases, suing your financial advisor or filing a legal claim against a brokerage firm may be your best path to recovering your money. However, most investment disputes don’t go through the regular court system.

That’s because most investment agreements include a mandatory arbitration clause, which requires you to resolve your dispute through the Financial Industry Regulatory Authority (FINRA)—not in court. This process is called FINRA arbitration.

Filing a FINRA arbitration claim can allow you to recover lost investment funds due to fraud, negligence, or breach of fiduciary duty. Our Illinois investment fraud lawyers have extensive experience handling these claims and can guide you through the entire process.

What Is FINRA Arbitration?

FINRA is the self-regulatory organization that oversees brokerage firms and financial advisors. When an investor files a complaint against a financial advisor or firm, it often goes through FINRA’s dispute resolution forum.

Here’s how FINRA arbitration typically works:

1. Filing a Claim: You submit a statement of claim outlining the fraud or misconduct that caused your losses.
2. Response: The advisor or brokerage firm has 45 days to respond.
3. Discovery Phase: Both sides exchange documents and evidence.
4. Hearing: An arbitration panel hears the case and issues a binding decision.

Unlike a court case, a FINRA arbitration is typically resolved in about 12–18 months. Most claims are resolved either through a settlement or a final award issued by the arbitrators.

If you’re wondering how to file a FINRA arbitration claim in Illinois, the first step is to contact Stoltmann Law Offices. A qualified attorney can determine whether you have a case and help you gather evidence.

Common Warning Signs of Investment Fraud

Many investors don’t realize they’ve been defrauded until it’s too late. Here are some common red flags:

• Promises of guaranteed or unusually high returns
• Pressure to invest quickly or “not miss out”
• Limited access to your funds or unclear account statements
• Unregistered investment products or advisors
• Sudden account losses with no explanation

If you recognize any of these signs, or if you’ve already lost money, speak with an Illinois investment fraud lawyer as soon as possible. Time is critical—there are deadlines (called statutes of limitations) that limit how long you have to file a claim.

Who Can Be Held Responsible?

Several parties may be legally liable for investment losses due to fraud or negligence:

• Individual financial advisors who gave bad advice or misrepresented the risks
• Broker-dealers who failed to supervise their advisors or approved unsuitable investments
• RIA firms (Registered Investment Advisers) who breached their fiduciary duty
• Third parties who marketed, promoted, or facilitated the fraudulent investment

Illinois law and federal regulations (such as Regulation Best Interest) require advisors to act in the best interests of their clients. If they failed to meet this standard, you may be entitled to compensation.

How to Check If Your Advisor Is Legitimate

Before investing—or if you’ve already invested and are suspicious—check whether your advisor is properly licensed:

• FINRA BrokerCheck (brokercheck.finra.org): This tool shows if a broker is registered, and whether they have customer complaints, arbitration awards, or regulatory actions.
• SEC’s Investment Adviser Public Disclosure (IAPD): For checking if a firm or individual is a registered investment adviser.

If your advisor isn’t listed, or has multiple complaints, contact an attorney immediately. Many victims only discover their advisor had a long history of misconduct after losing money.

How to Recover Investment Losses with a Illinois Investment Fraud Lawyer

If you’re asking yourself, “Can I get my money back from a bad investment?”—the answer is often yes, depending on the facts of your case.

Here are the key legal paths for recovery:

1. FINRA Arbitration

As noted above, most claims against brokerage firms and registered financial advisors go through FINRA. This is the primary method for recovering losses due to:

• Unsuitable investment recommendations
• Overconcentration
• Misrepresentation or omissions
• Failure to supervise

2. Lawsuits in State or Federal Court

If your advisor is not affiliated with FINRA (for example, they’re an unregistered individual running a Ponzi scheme), then your case may go to court. Lawsuits can be filed under:

• Illinois Securities Law of 1953
• Federal Securities Act
• Common law fraud

You may also be entitled to pursue punitive damages in cases involving egregious conduct.

3. Regulatory Complaints

While filing a complaint with the SEC, FINRA, or the Illinois Secretary of State’s Securities Department won’t directly get your money back, it may prompt enforcement action and help other victims.

Still, for personal recovery, you must typically file an arbitration or civil claim.

Real Illinois Cases Involving Investment Fraud

Here are a few real-life examples of investment fraud cases that have impacted Illinois residents:

• Ponzi Scheme in Naperville: A man was sentenced to prison after running a fake investment firm that defrauded retirees of more than $10 million. Victims filed lawsuits and FINRA claims to recover assets.
• Real Estate Fraud in Chicago Suburbs: Investors were lured into putting money into a real estate “fund” that didn’t exist. The advisor was unlicensed and the victims are now pursuing court claims.
• Overconcentration by RIA in Springfield: An advisor put most of his elderly clients’ money into risky energy stocks that collapsed. Investors successfully recovered funds through FINRA arbitration.

These cases show the importance of taking fast legal action when investment fraud occurs.

Don’t Wait—Deadlines Apply

Illinois investors who lost money due to fraud must act quickly. The statute of limitations for FINRA arbitration is generally six years from the date of the misconduct. In civil lawsuits, Illinois has a five-year limit for fraud claims, but timing may vary depending on when you discovered the fraud.

Delays can destroy your ability to recover money—especially if the fraudster has spent or hidden the funds.

Speak with an Investment Fraud Lawyer in Illinois

If you’re searching for “investment fraud lawyer Illinois” or wondering how to sue my financial advisor, we can help. Stoltmann Law Offices represents investors throughout Illinois—from Chicago and the suburbs to Springfield, Peoria, Rockford, and beyond—who have lost money in fraudulent or unsuitable investments.

We work on a contingency fee basis, meaning you don’t pay us unless we recover money for you. We’ll evaluate your case at no cost and let you know if you have a valid claim. Our team has handled hundreds of FINRA arbitration claims and court cases for wronged investors.

Contact Us Today for a Free Case Evaluation

Have you searched any of the following?

• “Can I sue my financial advisor in Illinois?”
• “I lost all my money in a scam investment—what now?”
• “How do I file a FINRA arbitration claim?”
• “Help for investment fraud victims in Illinois”

If so, we want to talk to you. The sooner you contact us, the better the chance of recovering your money. Call Stoltmann Law Offices at (312) 332-4200 or visit us online at www.ctt11.com.