Investment fraud remains a serious problem in Miami and throughout South Florida. From Ponzi schemes and broker misconduct to real estate and unregistered securities fraud, Florida investors lose millions each year due to deceptive or unlawful practices. Fortunately, Florida law provides powerful remedies that may allow victims to recover their losses.

Below are the most common investment fraud problems affecting Miami investors, the Florida statutes and case law that apply, and the legal options available for recovery. If you have questions about investment fraud in South Florida, contact Bernhard Law Firm at www.bernhardlawfirm.com, 786-871-3349, abernhard@bernhardlawfirm.com.

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1. Ponzi and Pyramid Schemes in Miami

Ponzi and pyramid schemes promise consistent or guaranteed returns but use new investor funds to pay earlier investors. Miami has been a frequent venue for these schemes due to its international investor base and real estate-driven investment culture.

Florida Law Resources:

• Florida Statutes § 517.301 – Prohibits fraudulent transactions and misrepresentations in connection with securities
• Florida Statutes § 772.11 – Civil theft remedies
• Otto Candies, LLC v. Citigroup Inc., 137 F.4th 1158 (11th Cir. 2025) – discussing liability theories for parties assisting fraud
• Gilison v. Flagler Bank, 303 So. 3d 999 (Fla. 4th DCA 2020) – discussing liability for substantial assistance in fraud
• Wiand v. Morgan, 919 F. Supp. 2d 1342 (M.D. Fla. 2013) – on liability of hedge fund investors and operators in Ponzi Scheme
• State v. Croy, 813 So. 2d 993 (Fla. 1st DCA 2002) – on criminal felony conviction for participation in pyramid scheme

Loss Recovery Options:

• Civil fraud and securities claims
• Asset freezes and receivership recovery
• Claims against facilitators (banks, advisors, promoters)
• Participation in restitution proceedings

2. Securities Fraud and Wire Fraud

Securities fraud often involves false statements, omissions, or misuse of investor funds. Many Miami investment fraud cases involve interstate communications, triggering both state and federal liability.

Florida Law Resources::

• Florida Statutes § 517.301 & § 517.211 – Fraud and investor civil remedies
• 18 U.S.C. §§ 1343 & 1348 – Federal wire and securities fraud
• Alaska v. Ryder Systems, Inc., 603 F. Supp. 3d 1229 (S.D. Fla. 2022) – discussing standards for securities fraud claims
• Kousisis v. United States, 605 U.S. 114 (2025) – discussing standards for federal wire fraud conviction

Loss Recovery Options:

• Civil actions for rescission or damages
• Claims for fraud in the inducement
• Coordination with SEC or DOJ enforcement
• Potential recovery of attorney’s fees under § 517.211

3. Unregistered Securities and Affinity Fraud

Florida investors are frequently sold unregistered securities such as promissory notes, private funds, or crypto-related offerings. Affinity fraud exploits trust within cultural, religious, or professional communities.

Florida Law Resources:

• Florida Statutes § 517.07 – Registration of securities
• Florida Statutes § 517.12 – Registration of dealers and agents
• Florida Statutes § 517.211(1) – Automatic rescission for unregistered sales
• SEC Resources on Affinity Fraud
• In re FTX Cryptocurrency Exchange Collapse Litigation, 781 F. Supp. 3d 1324 (S.D. Fla. 2025) – on standard to state securities law claims in context of unregistered securities in cryptocurrency
• SEC v. Sky Group USA LLC, 2022 WL 309378 (S.D. Fla. 2022) – on SEC prosecution of affinity fraud.

Loss Recovery Options:

• Statutory rescission (return of investment)
• Joint and several liability claims
• Claims without needing to prove intent
• Recovery against control persons and promoters

4. Broker Misconduct and Fiduciary Breaches

Broker misconduct includes unsuitable investments, excessive trading, failure to disclose risks, and conflicts of interest. Many investors are unaware these actions violate industry rules.

Florida Law Resources:

• FINRA Rules 2111 & 2090 – Suitability and “know your customer”
• Florida common law fiduciary duty
• Turberville v. Department of Financial Services, 248 So. 3d 194 (Fla. 1st DCA 2018) – on FINRA and state statute and rules for revoking licenses on broker and agent misconduct
• Grant v. Rotolante, 147 So. 3d 128 (Fla. 5th DCA 2014) – on FINRA arbitration requirements

Loss Recovery Options:

• FINRA arbitration claims
• Breach of fiduciary duty lawsuits
• Employer liability against brokerage firms
• Compensatory damages, interest, and costs

5. Fraud Involving Complex or High-Commission Investments

Structured notes, non-traded REITs, private placements, and alternative investments are often marketed as low-risk despite significant downside exposure and high commissions.

Florida Law Resources:

• Florida Statutes § 517.301 – Material misrepresentations and omissions
• SEC Regulation D (federal but often litigated in FL courts)
• Sheen v. Jenkins, 629 So. 2d 1033 (Fla. 4th DCA 1993) – on tax shelter investments and investor requirement to investigate speculative nature of investment or rely on advice
• Faye L. Roth Revocable Trust v. UBS Painewebber, Inc., 323 F. Supp. 2d 1279 (S.D. Fla. 2004) – on scope of Regulation D and misstatements in offerings

Loss Recovery Options:

• Unsuitability and misrepresentation claims
• Failure to disclose fees and risks
• FINRA arbitration or state court litigation
• Partial or full recovery of invested funds

6. Real Estate Investment Fraud in Miami

Real estate fraud commonly involves pre-construction projects, syndicated investments, or misuse of investor capital. Many such investments qualify as securities under Florida law.

Florida Law Resources:

• Florida Statutes § 517.021(22) – Definition of “security”
• Florida Statutes § 772.103 – Florida RICO Act
• Combe v. Flocar Investment Group Corp., 977 F. Supp. 2d 1301 (S.D. Fla. 2013) – on real estate investor claims for fraud and breach of fiduciary duty against property managers
• In re Soderstrom, 654 Fed. App’x 987 (11th Cir. 2016) – on limitation to discharge debt related to failed real estate development and fraud in bankruptcy

Loss Recovery Options:

• Securities fraud claims
• Civil RICO actions
• Breach of contract and fraud claims
• Asset tracing and injunctions

7. False Statements and Investment Misrepresentation

Promises of guaranteed returns, false performance histories, or claims of regulatory approval frequently lead investors to make decisions they otherwise would not.

Florida Law Resources:

• Florida Statutes § 517.301
• Florida common law fraud
• U.S. v. Preetorius, 626 Fed. App’x 920 (11th Cir. 2015) – on evidence to support convictions for mail fraud and wire fraud in real estate investment scam

Loss Recovery Options:

• Fraud and negligent misrepresentation claims
• Rescission and compensatory damages
• Potential punitive damages in egregious cases

Why Acting Quickly Matters

Florida investment fraud claims are subject to strict statutes of limitation and repose, often as short as two to five years depending on the claim. Delays can result in lost evidence, dissipated assets, or barred claims.

If you or a loved one has suffered investment losses in Miami or anywhere in Florida, you may have legal options beyond accepting the loss. An experienced investment fraud attorney can review your situation, identify potential violations of Florida securities laws, and pursue recovery through arbitration or litigation.

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This article is provided for informational purposes only and does not constitute legal advice. Reading this content does not create an attorney-client relationship. Every investment fraud case is unique, and results depend on specific facts and applicable law. You should consult a qualified attorney licensed in Florida to discuss your individual situation.

If you have questions about investment fraud in South Florida, contact Bernhard Law Firm at www.bernhardlawfirm.com, 786-871-3349, abernhard@bernhardlawfirm.com.