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http://ssrn.com/abstract=921074
 
 

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'With Friends Like These...': Toward a More Efficacious Response to Affinity-Based Securities and Investment Fraud


Lisa M. Fairfax


George Washington University - Law School


Georgia Law Review, Vol. 36, p. 63, 2001
U of Maryland Legal Studies Research Paper No. 921074

Abstract:     
This article highlights the increase in affinity fraud - securities and investment fraud targeting members of a particular racial or ethnic group perpetrated either by a member of that group or someone claiming to advance the groups' interests. Affinity fraud differs from other forms of securities fraud because perpetrators establish their credibility and the credibility of their investment schemes by appealing to the trust that group members share, often promising that some of the invested funds will be used to assist the group's church or ethnic community. This reliance on group trust and sense of community persuades otherwise cautious people to participate in these fraudulent investment schemes. These schemes fleece people out of millions of dollars and have drawn the concern of state regulators around the country, causing such regulators to rank it among the top five most problematic securities schemes. This Article argues that the fact that these securities schemes prey on people's charitable impulses and sense of group trust justifies enhancing the punishment of those who commit affinity fraud.

Number of Pages in PDF File: 58

Keywords: securities fraud, investment fraud, affinity fraud

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Date posted: July 31, 2006  

Suggested Citation

Fairfax, Lisa M., 'With Friends Like These...': Toward a More Efficacious Response to Affinity-Based Securities and Investment Fraud. Georgia Law Review, Vol. 36, p. 63, 2001; U of Maryland Legal Studies Research Paper No. 921074. Available at SSRN: http://ssrn.com/abstract=921074

Contact Information

Lisa M. Fairfax (Contact Author)
George Washington University - Law School ( email )
2000 H Street, N.W.
Washington, DC 20052
United States
202-994-4630 (Phone)
HOME PAGE: http://www.law.gwu.edu/Faculty/profile.aspx?id=16144
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