New York, NY securities attorney Jenice L. Malecki talks about the necessary evidence to prove misconduct related to self-directed IRAs. She explains that if a broker or advisor instructs a client to first transfer funds to their personal bank account and then into a self-directed IRA, it may be an attempt to circumvent the firm’s supervisory review. If this behavior becomes a pattern—such as in cases of affinity fraud, where multiple clients follow the same instructions—it can serve as strong evidence that the brokerage firm failed to notice a red flag. Ideally, such patterns should be captured in exception reports or other supervisory documentation. Investigators will look for emails or communications from the brokerage or investment advisory firm directing these transactions or discussing outside alternative investments. Any connection to the brokerage, advisory firm, or custodian that suggests complicity would need concrete evidence, which can be challenging to obtain, but it is crucial in holding all responsible parties accountable, not just the fraudster.