Stockbroker Fraud Lawyers
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An investment advisor’s fiduciary duty is to manage their clients’ money honestly, fairly, and professionally. Any mishandling of your finances can have devastating effects on you and your family. A stockbroker must also act only in a client’s best interest when recommending a securities transaction or type of an account.
Securities laws and FINRA policies have complex rules and regulations that direct brokers’ conduct. When a stockbroker or firm violates their responsibilities, causing their clients significant losses, these statutes protect the victims.
However, investment loss claims require an extensive understanding of securities arbitration to achieve the best possible results. You’re not alone – the stockbroker fraud lawyers at Oakes & Fosher, LLC, are dedicated solely to representing wronged investors. We’ve fought and won compensation for thousands of investors nationwide.
Contact our firm today for a free, confidential evaluation. Let’s discuss your situation and determine whether you’re eligible to recover your losses.
Stockbroker Fraud Guide
- What Is Stockbroker Fraud?
- Signs of Stockbroker Fraud
- Reporting Stock Fraud
- How Our Stockbroker Fraud Attorneys Can Help Recover Your Investment Losses
What Is Stockbroker Fraud?
No one should have to suffer investment loss due to a broker’s misconduct . Unfortunately, though, numerous investors are victims of stockbroker fraud every day.
Stockbroker fraud occurs when a financial professional or advisor intentionally persuades an investor to make an investment decision based on falsified or exaggerated information. In these situations, the stockbroker or firm puts its own best interests ahead of its clients’.
If an advisor or broker acted negligently, causing financial losses as a result, you must know your rights. Our stockbroker fraud lawyers can help you understand your legal options.
Signs of Stockbroker Fraud
Stockbroker fraud is difficult to spot, but a lawyer can monitor your investment accounts and see the telltale signs of misconduct. If you have reason to believe that your stockbroker committed a form of fraud with your investments, you have the right to file a claim.
Commonly committed violations include:
- Unauthorized transactions
- Unsuitable recommendations
- Overconcentration
- Failure to diversify
- Churning
- Mismanagement of accounts
- Misrepresentations and omissions
Unauthorized Transactions
Imagine you check your investment account and notice some trades or sales you don’t remember approving. This could indicate unauthorized transactions, which means someone moved your money without consulting you first.
In the investment world, brokers must get your okay before making any trades. Keep a close eye on your account and speak up if you notice anything that doesn’t seem right.
Unsuitable Recommendations
Brokers must guide their clients toward appropriate – or suitable – investments, considering risk level, diversity, goals, financial picture, and more. Using this information, stockbrokers are responsible for recommending a profile that works for your current situation. Recommendations that don’t meet the criteria are unsuitable and can cause unnecessary financial loss.
Failure to Diversify & Overconcentration
A crucial factor in stock portfolio management is diversification. Diversifying your investments helps spread your risk threshold, meaning that well-performing investments in particular industries mitigate potential losses from another. However, if a stockbroker overconcentrates your portfolio in too few companies or markets, you risk significant losses from normal market fluctuations.
Churning
Stockbrokers make a living by trading with their clients’ funds. Although each account has parameters based on income, tax needs, and risk tolerance, some brokers take advantage by trading too much for the criteria. The more they trade, the more they earn.
While excessive trading – also called churning – can make money, quite often, it results in loss. In these situations, the stockbroker doesn’t owe you any compensation unless you file a claim. Our churning attorneys can help.
Mismanagement, Misrepresentation, & Omission
Three common types of misconduct include mismanagement, misrepresentation, and omission. Mismanagement occurs when a broker fails to exercise reasonable diligence in handling a client account, leading to loss.
Misrepresentation involves a broker providing false or misleading statements about investments and qualifications, thus providing inaccurate information and exaggerating returns. Omission refers to stockbrokers failing to disclose information to the client, like risk or conflicts of interest that could deter the decision to invest.
Reporting Stock Fraud
If you’ve noticed any of the above violations occur in your investment portfolio, you have options. There are several ways to report stock fraud in the United States, but it’s critical to take action immediately. The quicker you act, the better your chances of achieving justice for your losses.
You can report stockbroker fraud through the following avenues:
- US Securities and Exchange Commission (SEC)
- Applicable state or federal agencies
- Stockbroker fraud lawyers
Like any legal claim, you have a limited period – known as the statute of limitations – to recover. The time allotted can vary depending on the route you take.
If you pursue a claim through the court system, you have five years from the date of the fraudulent act. Those who choose to recover their losses through FINRA arbitration have six years from the date of the fraudulent action.
Whatever route you take, our experienced securities fraud attorneys at Oakes & Fosher, LLC, can help reclaim what’s yours.
How Our Stockbroker Fraud Attorneys Can Help Recover Your Investment Losses
Whether you know or suspect that you’re a victim, it’s imperative to document all details and seek help from a stockbroker fraud lawyer.
An attorney will:
- Analyze your financial statements
- Determine if stockbroker misconduct occurred
- File a detailed claim with FINRA against the negligent broker or brokerage firm responsible
The stockbroker fraud attorneys at Oakes & Fosher have extensive knowledge of securities arbitration laws. We possess the experience and resources required to develop a strong strategy that recovers your investment professionally and confidentially.
Our top priority is ensuring our clients receive the highest-quality legal services possible and that they recover any compensation to which they are entitled from stockbroker misconduct or negligence.
If you believe you’re a victim of stockbroker fraud, please contact Oakes & Fosher today for a complimentary consultation. Our attorneys work on a contingency fee basis. You will not be charged for our services unless we successfully collect money for you.
Call (314) 428-7600 to speak to a securities fraud attorney today.
Stockbroker Fraud FAQ
When is an investment recommendation not right for you?
Your stockbroker should help you pick investments that fit your financial situation, how much risk you can handle, and your goals. If they suggest something that doesn’t match up with these things, they may have committed stockbroker fraud.
What does putting too much into one investment mean?
You’ve probably heard the phrase, “Don’t put all your eggs in one basket.” It applies to investing, too. If all your money is in one type of investment, and it does poorly, you could suffer hefty losses.
A good stockbroker helps spread your investments around to reduce risk. If your stockbroker doesn’t, they may have committed fraud.
What if a stockbroker makes trades without your approval?
Your stockbroker should always get your permission before making a trade with your money. If they don’t, it might qualify as fraud.
What if you’re not told the whole truth about an investment?
Your stockbroker must tell you the truth about any investment, including the risks. If they leave out important details or give you misleading information, you’re not able to make a sound decision. This dishonesty is a type of stockbroker fraud.
Can a stockbroker use your money for their own purposes?
The most clear-cut fraud occurs when a stockbroker takes your money for their own use rather than investing it. Whether they’re using your investment funds for their own bills or taking money directly from your account, it’s theft and a breach of trust.
What’s the problem with too much trading?
Stockbrokers usually earn money through commissions on trades. Some might make numerous trades in your account to earn more commissions, even if it’s not in your best interest, an act known as churning. It can hurt your investments while benefiting the stockbroker.
Is going to court always an option in stockbroker fraud cases?
Not always. Many agreements with stockbrokers include a clause that requires any disputes to be settled through arbitration instead of court. This means a neutral third party will hear your case and make a decision. The arbitration route can be quicker and less expensive than going to court.
What is FINRA arbitration?
FINRA stands for Financial Industry Regulatory Authority. Its arbitration process is a way to resolve disputes between investors and stockbrokers without a traditional court trial.
It involves:
- Filing a claim
- Choosing an arbitrator
- Attending a hearing, much like a less formal version of court
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Client Testimonials
We’ve helped hundreds of clients with their securities fraud matters. See what our satisfied clients have to say.
I would like to thank Bruce Oakes and his professional and successful representation. My investment fraud case was settled in a fair and timely manner. Mr. Oakes and his entire staff were communicative and supportive throughout the process. I highly recommend the firm to anyone who has been taken advantage of by an unscrupulous broker.
Simply grateful for people like you. Thank you for taking my case, appreciate everything you did.
Dear Bruce – I’ve had the great good fortune not to have needed a lawyer for most of my life, but when I did, I’m thankful I found you. Saying someone went “above and beyond” is a cliché, but your work on our behalf – even after the case was over and you had no obligation to us- restored my faith in people. You truly did go above and beyond for us and made a long, draining, bummer of a situation inherently better. If you ever need a reference, you can count on me.