We trust stockbrokers, financial advisors, and brokerage firms to help us manage our money and investments. Unfortunately, some brokers and firms take advantage of this trust, enriching themselves at their clients’ expense. Others engage in reckless behavior, such as recommending or conducting transactions that are inappropriate for a client’s investment goals or financial needs. If this has happened to you, an Illinois stockbroker fraud attorney from Erez Law, PLLC, can help you pursue accountability and justice from the party that wronged you.
Our attorneys have decades of experience securing full financial compensation for victims of stockbroker and investment fraud. Our firm focuses exclusively on this area of the law, giving us the experience and resources to take on even the largest Wall Street firms and brokerages. Our attorneys have recovered more than $200 million in financial compensation on behalf of our clients.
If you believe that you may have been the victim of securities fraud, reach out to Erez Law, PLLC, for a free case review with a knowledgeable Illinois stockbroker fraud attorney. We can help you understand your legal options for pursuing financial recovery, and you don’t pay any legal fees unless we recover payment for you.
What Is Considered Stockbroker Fraud?
In most cases, investment losses occur due to the normal fluctuations of the market. However, investors can suffer financial losses due to their stockbroker’s misconduct or reckless actions or omissions. A broker’s duty to their client requires formulating an investment strategy based on that client’s finances, risk tolerance, and future goals. The broker’s duty also requires making investment decisions that reasonably follow the strategy developed for a client.
When a broker takes investment actions and makes decisions that do not reasonably further the client’s investment strategy or that are intended to benefit the broker or firm without regard to the client, they may be held liable for the resulting losses.
How to Recognize Signs of Stock Fraud
Common signs of stockbroker or brokerage firm fraud or misconduct include:
- Your brokerage statements are inscrutable or include transactions you can’t identify or did not authorize.
- You suffer a dramatic drop in the value of your investments in a short period of time, or you continue to lose money on your investments despite growth in the broader market.
- Your broker fails to provide you with material information regarding a recommended investment, or the information provided is inaccurate or misleading.
- Your broker begins placing you in high-risk or speculative investments without getting your approval for such a strategy.
- The investments your broker recommends regularly lose value or have financial results that fail to meet publicly announced expectations.
- Your broker or their firm stops answering the phone or returning phone calls and emails.
- You have to pay capital gains tax even though your investments appear to have lost value.
Do not wait to seek legal advice if you suspect stockbroker fraud. Speak to an Illinois stockbroker fraud attorney from Erez Law, PLLC, to learn how we can help.
Common Types of Stockbroker Fraud
Examples of behavior that may constitute stockbroker fraud include:
- Excessive trading, or conducting a large number of trades to generate fees for the broker and firm, rather than trying to serve the client’s investment strategy
- Selling away a client’s portfolio without authorization
Unauthorized trading on behalf of a client
- Unsuitable investments, such as putting money in high-risk or speculative investments on behalf of a client nearing retirement
- Lack of diversification, as a broker, should ensure that a client’s portfolio has broad exposure so as to avoid significant losses from a downturn in any particular industry or sector
- Excessive use of margin, which may leave a client liable to repay margin funds if an investment suffers a loss of value
- Misrepresentation or omission regarding an investment
- Churning, which refers to the practice of a broker selecting investments based on the commission they earn, rather than based on the investment’s suitability for the client
- Pump and dump schemes, in which investments are fraudulently presented to investors, who buy into the investment and thereby inflate the price, enabling organizers to sell their stake at a high price before investors realize the scheme and the price collapses
- Unregistered securities sales, including selling clients on investments in high-risk or speculative startup companies
- Failure to execute trades, particularly when ordered by the client
- Failure to supervise, which refers to a brokerage firm’s failure to provide necessary oversight of the individual brokers in the firm
- Misleading or incomplete disclosures, such as conflicts of interests present in a broker’s recommended investments, including fees or commissions the broker stands to earn
- Misappropriation, or taking client assets for the broker’s or firm’s own benefit
- Overconcentration, or improperly weighting a client’s portfolio too heavily into one investment or industry/sector
- Breach of fiduciary duty, or the duty of a broker or brokerage to act reasonably and in good faith and to always put the interests of the client ahead of the broker’s or firm’s interests
- Broker negligence, or not taking a prudent course of action that other reasonable brokers would have taken
- Violation of state and federal regulations, or violations of regulations of private regulatory agencies such as FINRA
How Our Illinois Stockbroker Fraud Attorney Can Help You
If you have experienced financial losses because of suspected misconduct, an Illinois stockbroker fraud attorney from Erez Law, PLLC, can help you by:
- Investigating your case and reviewing critical evidence of your stockbroker’s fraudulent behavior or misconduct, such as your brokerage account statements, other financial records, and market performance records
- Calculating the financial losses that you suffered from the fraud or misconduct, including retaining financial experts where necessary
- Explaining your legal rights and options, filing formal complaints with regulators, and pursuing full financial compensation for your losses
At Erez Law, PLLC, our attorneys will leave no stone unturned when it comes to fighting for the maximum financial recovery you deserve. We are dedicated to holding brokers and firms accountable when their fraudulent behavior and misconduct harm innocent investors.
Time Limits for Taking Action
Federal securities law, Illinois state law, and the Financial Industry Regulatory Authority (FINRA) set specific time limits for defrauded investors to take legal action. Because the length of time you have to file a claim for compensation can depend on multiple factors, you need to speak to an Illinois stockbroker fraud attorney as soon as possible to ensure you do not miss any important deadlines.
Talk to an Illinois Stock Fraud Lawyer Now
Has a financial advisor’s fraudulent behavior harmed you? If so, our firm can help. Contact Erez Law, PLLC, today for a free and confidential consultation with a trusted Illinois stockbroker fraud lawyer. We can help you demand compensation and justice from the stockbroker or brokerage firm that wronged you.
Our firm works with clients in Chicago, Aurora, Naperville, and across Illinois. We have earned a reputation for representing investors in stock market fraud cases throughout the United States and around the world.