Adviser error or investment fraud?

An adviser error presupposes that the adviser breaches a contract. However, there is no intent on his part to cause damage to the investor. In the case of investment fraud, the money is used in dishonest endeavours, e.g. investment is made in financially unsound projects, horrendous fees are charged or investment funds pass through bogus companies and into the hands of shady individuals. An investment fraud is always also an adviser error (breach of contract), but adviser error seldom represents an investment fraud. The limit of punishable conduct must have been exceeded in order for an investment fraud to exist.

See also: Adviser errors?

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