People trust stockbrokers and brokerage firms to help manage their assets and provide expert investment advice that will grow their wealth. We expect them to act in our best interests and offer recommendations that are aimed at advancing our financial goals. In fact, brokers and advisors have a professional responsibility to do so.
Unfortunately, in some cases, stockbrokers and brokerage firms violate the law and put their own financial interests ahead of those of their clients. This may involve pushing clients to purchase investments that are unsuitable for them, offering incomplete or inaccurate information about products, or promising unrealistic returns. When an investor suffers a financial loss because of a broker or firm’s misconduct, a New Jersey stockbroker fraud attorney can help them understand their legal rights to pursue a claim for financial recovery.
For more than two decades, the legal team of Erez Law, PLLC, has advocated on behalf of victims of investment fraud. We have successfully brought cases against some of the biggest firms on Wall Street. Our team has the experience and the resources to thoroughly pursue even the most complex stockbroker fraud causes. Our success is reflected in the more than $175 million that we have won for our clients.
If you believe you may have been the victim of stockbroker fraud, you have the right to demand answers and accountability for the financial losses that you have suffered. Contact Erez Law, PLLC, today for a free initial consultation with a knowledgeable New Jersey stockbroker fraud attorney. Our firm does not charge any fees unless we recover payment for you in your stock market fraud case.
What Is Considered Stockbroker Fraud?
While brokerage clients may lose money due to regular market fluctuations, sometimes they suffer financial losses due to intentional or reckless misconduct on the part of their brokers. Stockbrokers are expected to have sufficient information about a client’s income, financial status, investment goals, and risk tolerance so that they can develop an investment strategy tailored to the client’s needs. Brokers are also expected to make investment decisions that plausibly serve those needs. However, when a broker makes decisions that do not reasonably serve that investment strategy or that benefit the broker’s or brokerage’s interests to the detriment of their client’s, that broker may have engaged in fraudulent behavior that can be remedied through legal action.
What Are the Signs of Stock Fraud?
The following warning signs may suggest that your stockbroker is engaging in fraudulent behavior:
- Your account statements don’t make sense, or they reflect debits, credits, or transactions that you did not authorize and have no knowledge of.
- Your investments suffer a steep drop in value in a short period.
- You are losing money despite the market broadly rising in value.
- You are being assessed capital gains tax even though your account statements show that your investments have lost value.
- Your broker fails to disclose material information regarding a proposed stock or investment strategy.
- Your broker regularly recommends investments that lose value.
- The investments your broker recommends regularly have financial results below their announced expectations.
- Your broker begins trading in speculative or high-risk investments.
- You can’t get your broker on the phone, or your broker stops responding to calls or emails.
Because all investments come with the risk of loss, simply losing money on an investment does not necessarily mean that your broker has engaged in fraud or misconduct. However, if you have experienced these warning signs, it should serve as a signal to speak to a New Jersey stockbroker fraud attorney from Erez Law, PLLC, as soon as possible. We are prepared to investigate your situation and determine whether you may have been the victim of fraudulent behavior or misconduct.
Common Types of Stockbroker Fraud
Common examples of fraudulent behaviors by stockbrokers or brokerage firms include:
- Excessive trading, in which a broker makes an unreasonable number of trades on a client’s account for the purpose of generating fees for the broker
- Selling away, which occurs when a client has not authorized liquidation of their portfolio
- Unauthorized trading, especially in accounts where the broker is required to obtain the client’s approval for a trade
- Unsuitable investments, including speculative investments made on behalf of clients who have not approved a high-risk strategy
- Lack of diversification, as a reasonable investment strategy should be well-diversified to protect against downturns in certain investments
- Excessive use of margin, which can make the client liable for funds if margin investments lose value
- Misrepresentation or omission regarding the nature or risk of an investment or strategy
- Churning, which refers to the practice of making investment decisions on behalf of a client based on the commissions the broker earns for the investment, rather than whether the investment serves the client’s interests
- Pump and dump schemes, a practice that involves fraudulently hyping up a junk or fraudulent investment to increase its value, after which the scheme organizers sell their investment at a high price before the value collapses
- Unregistered securities sales, including investing clients in speculative or high-risk startups
- Failure to execute trades that were ordered or authorized by the client
- Failure to supervise, which occurs when a brokerage firm fails to oversee its brokers’ activity
- Misleading or incomplete disclosures by stockbrokers about an investment
- Misappropriation, or taking a client’s assets or funds for the broker’s or the firm’s own benefit
- Overconcentration, or placing too large a portion of a client’s portfolio into a single investment or sector
- Breach of fiduciary duty, which occurs when brokers and firms fail to act in a good faith and reasonable manner to put clients’ interests ahead of the broker’s or the firm’s
- Broker negligence, or failing to follow industry best practices
- Violation of regulations, including those set forth by state and federal governments and by FINRA
How Our New Jersey Stockbroker Fraud Attorney Can Help You
When you have suffered investment losses due to misconduct or negligence, a New Jersey stockbroker fraud attorney from Erez Law, PLLC, can help you pursue accountability and justice by:
- Thoroughly investigating the facts of your case and reviewing important evidence that may show your broker’s fraudulent behavior or misconduct, including account statements, email records, and market analysis
- Documenting your financial losses and expenses
- Explaining your legal rights and filing complaints with regulators
- Vigorously pursuing a fair and full financial recovery for the losses you suffered
At Erez Law, PLLC, our legal team will fight hard to recover as much money as possible for the losses you have suffered. Contact us today to learn how we can help you.
Time Is Limited in Stock Fraud Cases
Investors have a limited amount of time to take legal action after being defrauded. Federal securities laws, state laws, and Financial Industry Regulatory Authority (FINRA) regulations outline strict time limits for pursuing financial compensation in an investment fraud claim.
Given the complexities of these cases, you should speak to a New Jersey stockbroker fraud attorney as soon as possible so that no important deadlines are missed in your claim. Your ability to secure compensation depends on your timely action.
Talk to a New Jersey Stock Fraud Lawyer Now
If you have suffered financial losses because of fraudulent behavior or misconduct by your stockbroker or brokerage firm, contact Erez Law, PLLC, today for a free case evaluation. It will cost you nothing to learn more about how a New Jersey stock market fraud lawyer from our firm can help you demand the compensation and justice you deserve.
Our securities fraud lawyers represent investors in Newark, Jersey City, Paterson, and throughout New Jersey. We are a nationwide firm that also works with international investors who have been defrauded. No matter your circumstances, we are here to help.