Law Commons^™

"With Friends Like These ...": Toward A More Efficacious Response To Affinity-Based Securities And Investment Fraud, Lisa M. Fairfax

Faculty Scholarship

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 …