Did Stockbroker Malpractice Cause You Financial Loss?

Losses in the stock market are not unusual — in fact, such losses happen any time the market takes a downturn. When your losses are due to stockbroker malpractice, however, you may have cause to file a lawsuit against your stockbroker.

A stockbroker is obligated by ethics and by law to give customers the full truth about an investment. Nonetheless, a broker may misrepresent an investment because the brokerage makes additional profits on that investment or is trying to shore up its own investment.

When you trust a stockbroker to handle your investments, you expect that broker to act as a reasonable broker would under similar circumstances. When you lose money because of broker malpractice, you may be entitled to compensation for your losses. The standards for stockbrokers and other investment advisors are well defined by FINRA, the NYSE, and other regulatory organizations.

A stockbroker or investment advisor is held to rigorous duties of loyalty and care and must conduct himself or herself with the utmost good faith and integrity. Since investors are encouraged to place their trust and confidence in their stockbroker whom they rely upon for expertise in making the investment decisions, the broker is held to an extremely high standard not to abuse that trust.

Some of the ways that your broker could have taken advantage of you include:

• Unsuitable recommendations: Your broker’s advice should take into consideration your risk tolerance, objectives, and financial resources.
• Churning or excessive trading: Your broker should not make excessive trades – a tactic that harms you and creates additional commissions.
• Unauthorized transactions: Your broker cannot – even with a power of attorney – make trades that are inconsistent with your directives.
• Rumors, false and misleading statements: A broker cannot mislead you about an investment.
• Insider trading and front running: Recommending stocks based on the broker’s interests or on insider knowledge is prohibited by established broker standards.
• Switching mutual funds: Brokers should not switch funds for the purpose of increasing commissions.
• Breach of fiduciary duty: The broker must manage your account according to your objectives, keeping you informed, and being mindful of your risk tolerance and financial resources.
• Selling away: Your broker should not sell you products that are not offered by the brokerage firm.
• Mis-marking order tickets, confirmations: By improperly marking tickets, the broker may be avoiding unwanted scrutiny into trades.

At The Spitz Law Firm, our stockbroker fraud attorneys understand the standards and the law. We are prepared to investigate and protect your interests.

If you believe your broker breached his or her fiduciary duty to you, and this breach resulted in losses in your account, contact us for a comprehensive and confidential evaluation with no obligation.

Call The Right Stock Broker Malpractice Attorney 24/7 At: 1-888-70-RIGHT or (216) 291-4744