| Stockbroker fraud can rob innocent
people of their retirement or even their life savings. Unfortunately,
Stockbroker misconduct, and even stockbroker fraud, have become
more common in the last few years. Have you become the victim of
stockbroker fraud? If you have, our stockbroker fraud lawyers can
help you recover losses caused by the fraudulent actions of stockbrokers
and their firms. Stockbroker fraud or inappropriate behavior include
trades involving stocks, bonds, commodities, mutual funds, "penny" stocks, "junk" bonds,
as well as other investments performed by your stockbroker.
What is Stockbroker Fraud?
There are many categories of stockbroker fraud. Typically, stockbroker
fraud consists of inappropriate actions of your stockbroker or
the brokerage firm. Besides the obvious illegal behavior such as
theft, other types of stockbroker misconduct includes churning,
unauthorized transactions, unsuitable investments, or even incompetence
and negligence by stockbrokers.
Common Stockbroker Fraud Cases
The most common stockbroker fraud cases include:
Stockbroker Fraud: Conflict of Interest
If your stockbroker or brokerage firm has outside ties to a business
and sells you that stock, they may have acted ouit of a conflict
of interest. Your stockbroker should offer you the best investment
for your needs, not the conflicted needs of the stock brokerage
firm.
Stockbroker Fraud: Continuing a Risk
If your stockbroker advises you to hold stocks based on speculation
or uncertain future events, even though the risks are obvious and
the potential gain is unlikely, then the stockbroker has put you
in a situation of "continuing a risk".
Stockbroker Fraud: Improper Investment Advice
Improper investment advice includes biased investment advice,
unfounded advice or contradictory advice. Biased investment advice
often occurs as a result of the stockbroker's or brokerage's desire
to move a certain stock based on fees they will receive, not the
based on the needs of the client. Unfounded advice occurs when
a stockbroker gives investment without doing proper research or
due diligence. A stockbroker is said to have given contradictory
advice when they give conflicting advice to different clients.
Stockbroker Fraud: Churning
"Stock churning" is considered excessive trading in
your account in an attempt to generate excessive commissions at
your expense. A stockbroker churns your account simply to make
more money. To prove your broker has churned your account, our
lawyers look for excessive trading activity. If you feel your broker
is buying and selling securities in an effort to fraudulently earn
excessive commissions, your may be a victim of stock churning.
Contact our stockbroker fraud lawyers to evaluate your case.
Stockbroker Fraud: Unsuitability
Stockbrokers have a duty to understand which investments are suitable
for their clients, based on individual clients needs and investment
objectives. Brokers also have a duty to understand each customer's
risk tolerance and financial ability to incur the risk associated
with their investment. In other words, if a stockbroker asks you
to invest in a stock that he knows is an unsuitable investment
for you, then you might be a victim of unsuitability.
Your stockbroker also has a duty to explain all risks associated
with a particular investment. If your stockbroker did not explain
the risks of an investment to you, he may be committing stockbroker
fraud.
Basically, it is your stockbroker's duty to understand your investment
needs and recommend appropriate investments. If your stockbroker
made unsuitable investment recommendations to you, he may be liable
for your stock losses.
Stockbroker Fraud: Overconcentration
One of the "golden rules" of investing in stock is to
diversify your portfolio. If a stockbroker fails to diversify your
portfolio, he may be potentially liable of overconcentration, and
therefore liable for your losses in the stock market.
Stockbroker Fraud: Misrepresentations and/or Omissions
A stockbroker is required to disclose material facts regarding
each investment. If your broker failed to disclose material facts,
and/or misrepresented material facts in order to get you to invest
in a particular stock, he may have committed stockbroker fraud,
and may be liable for your losses.
Inappropriate Stockbroker Activity
Stockbroker fraud and inappropriate stockbroker activity comes
in many forms. While churning, unsuitability, over concentration
and misrepresentations are the most common forms of stockbroker
fraud, there are many other ways in which stockbrokers can act
inappropriately. These inappropriate actions include:
- execution failures
- excessive mark-ups
- disappearing funds
- botched transfers
- web-broker outages
- "selling away" from firms
- unregistered brokers
- unregistered securities
- improper margin liquidations
- broker bribes
- fraudulent research
Arbitration
If you have suffered serious losses because of stockbroker
fraud, stockbroker negligence or other inappropriate stockbroker,
you could be forced into arbitration whith your stock brokerage
firm. You should be represented by an experienced stock broker
fraud lawyer in arbitration with a brokerage firm. Contact the
Rasansky Law Firm to discuss how our lawyers can help you.
Contact A Stockbroker Fraud Lawyer Today
Contact one of our
stockbroker fraud lawyers to discuss your case today. You can submit
your stockbroker fraud case, or just ask a
question, it's free, and you pay absolutely nothing until we win
your case. |
