Broker Misconduct Attorney
A financial advisor should be a source of appropriate recommendations, transparent information, and honest advice. They are an investor’s connections to Wall Street, recommending suitable investments and creating a diversified portfolio. The advisor-investor relationship relies on the ability to trust an advisor to provide suitable recommendations and treat their clients fairly.
Unfortunately, there will always be brokerage firms that abuse their position, pressuring brokers to sell bad investments to their clients through their advisers in order to increase their own profits at the expense of investors. While not all market losses stem from misconduct, some do. Learn to recognize this harmful practice to protect yourself and your family from fraud. If you believe you’ve been a victim of misconduct, Erez Law may be able to help you get some or all of your lost money back. Our law firm represents clients through the U.S. including Puerto Rico, as well as throughout Latin America in countries like Venezuela, Argentina, Colombia and Mexico. We represent individual investors, retirees, trusts, pension plans, partnerships, family partnerships, family offices and ultra-high net worth individuals. We are invested in helping you recover losses from untrustworthy or inexperienced brokerage firms.
The Broker Duty of Fair Dealing
Broker misconduct, or securities fraud, can cost a family hundreds of thousands of dollars in an instant. “Broker misconduct” is an umbrella term that refers to a range of ways a broker can betray the trust of his or her investors. Brokers must act in the best interests of clients throughout the investment relationship. The basic duty that brokers owe is a “duty of fair dealing.”
The duty of fair dealing is, in essence, a broker’s promise to disclose all facts relating to an investment, follow client instructions, ensure investments are suitable, and charge fair market rates. Investors trust brokers to steer them in the right direction regarding investments, advising them candidly. Brokers have many professional duties during the broker-client relationship, including:
- Making suitable recommendations
- Making fair and balanced risk disclosures
- Managing a client’s investment portfolio
- Disclosing conflicts of interest
- Researching financial markets
- Monitoring clients’ investments
- Reporting information to clients
The Securities and Exchange Commission (SEC), the Financial Industry Regulatory Authority (FINRA), federal securities laws and state securities laws have strict rules and laws when it comes to a financial advisor’s conduct. Although these rules regulate adviser conduct, many brokerage firms require advisors to recommend unsuitable investments to increase their own profits. Without truthful and complete disclosures, many bad brokers sell unsuitable investments and mislead their clients to their detriment.
Types of Broker Misconduct We Fight Against
A broker can commit fraud during any stage of the investing process. Negligent brokers may make a harmful mistake by failing to do their duties. Fraudulent brokers purposefully participate in deceptive schemes to boost their own commissions. Either way, victims may have a legal outlet that can help them regain their lost investments or retirement funds. Here are a few common types of broker misconduct we’ve encountered in our years as attorneys:
- Unsuitable investments. It’s a broker’s job to research the market, understand clients’ situations, and recommend investments that are appropriate for a client. No broker should compromise your future with unsuitable investments.
- Misleading or Incomplete Information. If a broker misleads a client regarding the risk of an investment or fails to disclose material information, this may be a violation of the broker’s obligation to his or her client.
- Churning. When a broker excessively purchases and sells securities in a client’s account (with or without authorization), it’s a red flag for broker fraud. Churning, or excessive trading, can generate extra commissions and fees for the broker.
These are just three of the many ways financial advisors can commit fraud or act carelessly. Other potential issues include:
- Excessive Trading
- Selling Away
- Unauthorized Trading
- Lack of Diversification
- Excessive Use of Margin
- Fraud or Misrepresentation
- Violation of State and Federal Regulations
- Broker Negligence
- Failure to Supervise
There are risks associated with investing, but your broker should not their source. If a broker’s misconduct has caused you substantial financial harm, we can help you hold them accountable.
Trustworthy Broker Misconduct Attorneys
Erez Law extends its professional legal services to anyone who believes a broker’s misconduct has caused major losses. If you’ve lost more than $50,000 in bond losses, fund losses, stock losses, or structured product losses, and you have a feeling there’s been foul play, contact Erez Law. Our trustworthy team of securities attorneys work to prosecute cases on behalf of wronged investors. Call (888) 840-1571 for a free consultation.