When you hire a stockbroker to provide you with skilled investment advice and to manage and grow your wealth, you trust that they will protect your financial well-being. Unfortunately, that’s not always what happens. In some serious cases, a broker or firm will seek to enrich themselves at the expense of their clients, taking actions or making recommendations adverse to the clients’ interests. If your broker or financial advisor has defrauded you, a Miami stockbroker fraud attorney from Erez Law, PLLC, can help you demand compensation for your losses.
For more than 20 years, our nationally recognized securities law firm has fiercely advocated on behalf of victims of broker and financial advisor fraud. We are dedicated exclusively to handling broker and stock fraud cases. Our legal team has the skills and the resources to take on the most powerful financial institutions on Wall Street. With a 99% success rate, we have recovered more than $200 million for our deserving clients.
If you have been the victim of fraudulent behavior or misconduct on the part of your stockbroker or brokerage firm, reach out to Erez Law, PLLC, today. A Miami stockbroker fraud attorney from our firm will explain your legal options and help you fight for the compensation you need to recover.
What Is Considered Stockbroker Fraud?
Stockbroker fraud occurs when a broker or brokerage firm engages in intentional misconduct or recklessness affecting a client. Brokers are expected to develop an investment strategy for each client that is based on the client’s financial situation, investment goals, and risk tolerance. When brokers make recommendations and decisions that do not reasonably serve a client’s chosen investment strategy, the client can suffer financial losses as a result.
In most cases of investment fraud, a broker or brokerage makes improper recommendations or decisions to enrich themselves at the expense of the value of their client’s portfolio. This can include taking actions that generate extra fees and commissions through transactions, or kickbacks for directing clients to particular investments.
Signs of Stock Fraud
Signs of potentially fraudulent behavior by a stockbroker or brokerage firm include:
- You can’t understand the details of your brokerage account statements, or the statements show transactions you have no knowledge of and did not authorize.
- Your broker fails to disclose material information about proposed investments or investment strategies.
- You are losing money on your investments despite the market rising in value.
- An investment significantly drops in value in a short period of time.
- You are assessed capital gains taxes even though your investments purportedly lost money.
- Your broker begins placing you in speculative, high-risk investments, even though you have not approved a high-risk investment strategy, or such a strategy is considered inappropriate for your situation (e.g., you are approaching retirement).
- Your broker’s recommended investments regularly lose value.
- A recommended investment’s financial results regularly fail to meet previously announced performance expectations.
- Your broker doesn’t return your voicemails or emails.
Although these signs may have perfectly innocent explanations, they could also suggest that you have been the victim of stockbroker fraud. As such, you should consider speaking with a Miami stockbroker fraud attorney who can investigate the situation and offer you legal advice on your options.
Common Types of Stockbroker Fraud
Fraudulent conduct or behavior on the part of a stockbroker can take many forms, including:
- Excessive trading, which is usually done by a broker to generate more fees, rather than for a legitimate purpose under the client’s investment strategy
- Selling away substantial investments or portions of a client’s portfolio without the client’s approval to liquidate
Unauthorized trading, especially in brokerage accounts where all trades require client approval - Unsuitable investments, including speculative or high-risk investments, or pursuing an investment strategy incompatible with a client’s financial needs or objectives
- Lack of diversification, including failure to ensure that investments are made in complementary sectors or industries to mitigate losses in a downturn
- Excessive use of margin, which can make a client liable to pay back margin funds where the client’s portfolio suffers a substantial loss of value
- Misrepresentation or omission of material details of a proposed investment or investment strategy
- Churning, or the practice of putting clients into a particular investment based solely on the commissions it generates for the broker, rather than the suitability of the investment for the client
- Pump and dump schemes, which involve fraudulently inducing investors to invest in a stock, thereby artificially inflating its price and allowing the scheme perpetrators to sell their stock at that higher price before the inevitable crash
- Unregistered securities sales, including investments in startups or high-risk emerging companies
- Failure to execute trades, including those that were ordered by a client
- Failure to supervise, or a brokerage firm’s failure to oversee the conduct of the individual brokers at the firm
- Misleading or incomplete information about a client’s account and their investments
Misappropriation, or taking client assets or funds for the broker’s or firm’s benefit - Overconcentration, or weighting too large a portion of a client’s portfolio in a single investment or sector
- Breach of fiduciary duty, which is the duty to act in good faith and to always place the client’s interests ahead of the interests of the broker or brokerage firm
- Broker negligence, including failure to diversify a client portfolio or not executing transactions requested by the client in a timely manner
- Violation of state and federal regulations, as well as violation of FINRA regulations as applicable
How Our Miami Stockbroker Fraud Attorney Can Help You
If you have suffered financial losses because of fraudulent actions or other misconduct, turn to a Miami stockbroker fraud attorney from Erez Law, PLLC, for help. We have the extensive experience and resources needed to:
- Investigate the suspected fraudulent activity of your stockbroker or brokerage firm, including by reviewing brokerage account statements, email communications, financial documents, and market analysis
- Determine the full extent of the financial losses you sustained as a result of the fraud
- Explain your legal options in detail, such as filing complaints against your broker or brokerage firm with state regulators and/or FINRA or pursuing a legal case to recover compensation for your financial losses
- Prepare and pursue your claim for maximum compensation against the broker and brokerage that defrauded you
Our Miami securities fraud law firm is committed to helping investors recover losses caused by stockbroker fraud. To learn more about how we can help you, contact us now for a free consultation on your stock market fraud case.
Time Limits for Taking Action on a Stockbroker Fraud Case
Florida securities law and federal law limits the time you have in which to file a civil lawsuit for stockbroker fraud. The Financial Industry Regulatory Authority (FINRA) also has strict time limits for filing a claim for compensation.
Do not wait to seek legal advice if you suspect stockbroker negligence or fraud. Your attorney will want to work quickly to investigate your case, gather all the evidence, and build a strong claim for financial compensation.
Talk to a Miami Stock Fraud Lawyer Now
If you have suffered financial loss because of fraud committed by your stockbroker or brokerage firm, contact Erez Law, PLLC, for a free initial case review. You can talk to a Miami stock fraud lawyer from our firm about your legal options for holding your broker or the firm accountable and demanding the compensation and justice you deserve. Our firm does not charge any legal fees upfront to start work on these cases. Instead, we are paid only when we secure payment for our clients. So there is no risk of getting the legal help you need.