Individual investors rely on stockbrokers and brokerage firms to help manage their money and grow their wealth through knowledgeable, sound investment advice. Unfortunately, some brokers choose to engage in fraudulent behavior and misconduct. This often involves making recommendations and taking actions completely divergent from a client’s interests in order to enrich themselves at their client’s expense. If you have suffered financial losses because of broker misconduct, a New York stockbroker fraud attorney from Erez Law, PLLC, can help you demand the compensation you deserve.
For more than 20 years, our firm has been dedicated exclusively to representing victims of financial professionals’ misconduct. We have helped clients from across the United States and around the world recover more than $200 million in compensation for investment losses. Our attorneys have taken on some of the biggest firms on Wall Street with a 99% success rate. No matter how complex your case may seem, our firm is prepared to advocate for the best possible outcome for you.
If you believe your stockbroker or brokerage firm committed fraud at your expense, contact Erez Law, PLLC, today for a free case evaluation with our NYC stockbroker fraud lawyers. We’ll explain your legal rights and help you pursue a legal claim for accountability and compensation from your broker at no upfront cost to you. In fact, we only get paid if we recover payment for you in your stock market fraud case.
What Is Considered Stockbroker Fraud?
Investors frequently lose money due to normal market performance. However, in some cases, an investor may suffer financial loss due to intentional misconduct or reckless behavior on the part of their stockbroker or financial advisor. Brokers are expected to obtain information regarding their client’s financial status, investment goals, and risk tolerance to determine an investment strategy that serves the client’s needs and goals. Brokers are then expected to make investment decisions on behalf of the client that serve the chosen investment strategy and fulfill the broker’s obligations to the client.
When a broker makes investment decisions or engages in transactions that do not reasonably fit within that strategy, they may be committing investment fraud. A broker who undertakes actions that provide the broker with a benefit while their client enjoys no benefit themselves or suffers a loss may also be guilty of fraud.
How to Spot Signs of Stock Fraud
Certain actions raise red flags that your stockbroker or brokerage firm may be engaged in fraudulent behavior or misconduct. These include when:
- Your brokerage statements don’t add up or make sense to you.
- You see transactions on your statements that you can’t identify and did not authorize.
- You are losing money even though the broader market is growing.
- You suffer a massive drop in value in your investments in a short period.
- The investments your broker recommends regularly lose value, or their financial results regularly fail to meet publicly announced performance expectations.
- Your broker is putting you in high-risk or speculative investments when you have not agreed to a high-risk strategy.
- Your broker fails to disclose important information about a prospective investment.
- You are paying capital gains tax even though your brokerage statements show your investments are losing value.
- Your broker stops returning calls or responding to emails.
Although these signs do not automatically mean that your stockbroker has engaged in fraud, they should prompt you to seek legal advice. A New York stockbroker fraud attorney from our firm can take a detailed look into your situation and make further recommendations.
Common Types of Stockbroker Fraud
Common examples of fraudulent behavior or misconduct by a stockbroker or brokerage firm include:
- Excessive trading, which may be motivated by a broker wanting to generate fees for themselves rather than by serving the client’s investment strategy
- Selling away and liquidating a client’s investments without authorization
- Unauthorized trading, especially when the terms of an account require the broker to obtain client authorization for any trades
- Unsuitable investments that do not reasonably fit within a client’s investment strategy or financial needs, such as high-risk investments for a client nearing retirement
- Lack of diversification, which can expose a client to significant financial loss if a particular investment or sector suffers a downturn
Excessive use of margin, which a client may have to pay back if margin trades lose value - Misrepresentation or omission of material facts regarding the risks of a particular investment or investment strategy
- Churning, which refers to the practice of brokers and firms making trades based on the commission that the broker or firm earns rather than based on whether the investment serves a client’s goals and interests
- Pump and dump schemes, in which the value of a company’s securities is inflated by fraudulent representations to attract investors, after which point the scheme organizers sell their stock at the high price before the deception is uncovered and the price collapses
- Unregistered securities sales, including investing client money into high-risk or speculative startups
- Failure to execute trades that have been ordered or approved by a client
- Failure to supervise, or a brokerage firm’s failure to oversee the conduct and actions of its individual brokers
- Misleading or incomplete disclosures regarding prospective investments, including potential conflicts of interests such as the fees or commissions the broker stands to earn from a transaction
- Misappropriation, or stealing client assets or funds
- Overconcentration, in which a client’s portfolio is too heavily weighted in a particular investment or sector
- Breach of fiduciary duty, which refers to a broker’s duty to act reasonably and in good faith, putting the client’s interest ahead of the broker’s interests
- Broker negligence, or failure to adhere to industry best practices
- Violation of state and federal regulations and/or FINRA regulations
How Our NYC Stockbroker Fraud Attorneys Can Help You
If you have been the victim of broker misconduct, a New York stockbroker fraud attorney from Erez Law, PLLC, can help you pursue financial recovery and justice by:
- Securing and reviewing all available evidence of broker fraud or misconduct, including account statements, other financial records, and records of market performance
- Working with expert witnesses as necessary to help persuasively explain how your broker’s behavior amounted to fraud or misconduct, as well as to calculate the full extent of the losses you sustained
- Advising you regarding your legal rights and options for pursuing recovery and justice, including filing regulatory complaints, pursuing FINRA arbitration, or filing a lawsuit for financial compensation
- Aggressively fighting for the full financial recovery you deserve
With Erez Law, PLLC, in your corner, you can trust you have a lawyer who will do whatever it takes to help you demand the money you’re owed and hold the fraudulent broker accountable. Get started today with a free and confidential consultation with a trusted securities fraud lawyer.
Time Limits for Taking Action in a Stockbroker Fraud Case
Investors have a limited amount of time to file a lawsuit under federal and state securities laws. This time limit, known as the statute of limitations, can vary depending on the circumstances of your case. The Financial Industry Regulatory Authority (FINRA) also has a strict time limit for filing claims.
As specific facts in your case will determine what time limits apply, you need to speak to a New York stockbroker fraud attorney as soon as possible to determine your best course of action.
Talk to a New York Stock Fraud Lawyer Now
When you have suffered financial loss due to a stockbroker’s fraud or misconduct, contact Erez Law, PLLC, for a free, no-obligation consultation, A knowledgeable New York stockbroker fraud lawyer can help you understand your legal rights and options for pursuing compensation for the losses you have incurred. We are prepared to do so at no upfront costs to you, and we don’t get paid until we secure payment for you.
Our nationally recognized law firm represents investors in New York City, Buffalo, Rochester, and throughout the state. We also work with international investors who have been victims of fraud.