Investment fraud remains a serious concern in the United States. In 2025, the U.S. Sentencing Commission reported 202 federal securities and investment fraud cases, a 43% increase from FY 2021. There were approximately $3.74 million median losses in these cases. The median loss in these cases was approximately $3.74 million, while 30% involved losses exceeding $9.5 million.

Securities-related complaints and enforcement activity also remained substantial. The SEC received 53,753 tips, complaints, and referrals in 2025 and filed 456 enforcement actions involving a range of securities-law violations. 

There are several consequences to investment frauds. Procuring significant financial losses is one of them. This happens especially when investors are misled about an investment, company, or financial opportunity. 

Victims may have different legal options, depending on their circumstances. They may pursue civil claims, report the conduct to regulators, or cooperate with a criminal investigation. But most of all, it would be best to consult an investment fraud lawyer to understand the legal options available and determine which steps may be available based on the circumstances of their claim.

Let’s take a closer look at the legal options for investment fraud claims. 

Civil Claims Come First for Most Victims

There are several investment frauds that people can be victims of. This includes brokers lying about the risk of the investment, hiding fees, or putting your retirement savings into something you never agreed to. When this happens, the first move you should make is to always file a civil claim rather than a criminal complaint.

 

Civil securities law exists to let harmed investors recover money, and it doesn’t require proving the wrongdoer acted with criminal intent, just that they breached a duty or made a material misrepresentation that cost you.

 

Most brokerage account agreements route these disputes into FINRA arbitration instead of open court. That’s a private process, and it moves faster than litigation typically does, though “faster” in legal terms can still mean months. 

 

An investment fraud lawyer will start by pulling your account statements and trading history to figure out whether the pattern matches known fraud markers: unauthorized trades, a risk profile that didn’t match what you actually held, unexplained fees eating into returns, or an advisor who got cagey when you asked direct questions about your money.

 

SEC enforcement data for fiscal year 2025 highlights the financial consequences of securities violations. During the year, the agency filed 456 enforcement actions and returned approximately $262 million to harmed investors, in addition to obtaining billions of dollars in penalties and other monetary remedies from firms and individuals.

 

Cases involving alleged investment misconduct are subject to an established regulatory framework designed to investigate securities violations and protect investors from financial harm. In one case involving Prophecy Asset Management, regulators alleged that a hedge fund adviser concealed more than $350 million in losses from investors.

When the Same Conduct Becomes a Criminal Matter

Here’s where things get more complicated, and where a lot of victims get confused about what’s actually happening in their case. 

 

The exact same conduct that supports a civil claim can also violate criminal fraud statutes. These conducts include the lies, the misappropriated funds, and the Ponzi-style shuffling of new investor money to pay off old investors. When that happens, prosecutors get involved, and the case takes on a different shape entirely.

 

Securities and investment fraud offenses increased 43% between 2021 and 2025, according to the U.S. Sentencing Commission, with the average sentence for a convicted defendant landing around 51 months. That’s federal prosecution. State-level fraud charges follow their own rules and can move on a completely different timeline from any parallel civil case an investor might file.

 

Sometimes the person accused of running the scheme is a defendant, not a victim. In fact, depending on how the scheme was structured, someone who recruited friends or family into it, even unknowingly, can end up facing scrutiny themselves. 

 

Georgetown criminal defense lawyer Lytza Rojas represents clients across white collar fraud, embezzlement, and money laundering matters, and cases like these illustrate why the criminal side of investment fraud needs its own legal strategy separate from any civil recovery effort. 

 

The two tracks don’t cancel each other out. A person can be a plaintiff in one courtroom and, in rarer and more tangled situations, a witness or even a target in another.

What This Means for Someone Weighing Their Options

Fraud cases vary wildly depending on jurisdiction, the type of investment involved, and how the scheme was actually run. As such, there is no prescriptive advice for any specific situation. The best thing to do is analyze the circumstances surrounding your claim.

 

Civil recovery through arbitration or litigation moves faster than a criminal prosecution, which can take years to reach trial if it gets there at all. Restitution ordered in a criminal case doesn’t always make a victim whole, and it often gets paid out slowly, if it gets paid at all, especially once assets have been dissipated. 

 

The overlap between these two systems catches people off guard constantly. Someone reports fraud to the SEC or FTC, expecting swift justice, only to learn that regulatory agencies don’t represent individual victims and criminal prosecutors decide independently whether charges are even worth pursuing. 

 

While the civil clock is ticking, statutes of limitations don’t pause just because a criminal investigation is underway.