Suing Your Broker – Risk Measurement and Inappropriate Investments
Risk management is an area of investing for which, unfortunately, the majority of brokers are not knowledgeable. Many brokers simply don’t know how to measure risk. It is important to keep in mind that what is a tolerable risk for one investor is not acceptable for another. Consequently, whether an investment is suitable depends in part upon the situation of the investor. Certain investments are never a good risk, but most depend upon the risk that the investor can afford to make. An older investor, for instance, who does not have a large portfolio may be wise not to invest in stocks that have higher risk, because he does not have the time in life to recoup a loss. A broker should not recommend extremely risky investments. Moreover, unsuitable investments can also involve a portfolio that does not have adequate diversification. An unscrupulous investor might recommend a risky investment simply in order to enjoy the commission. The broker might also engage in “churning,” which is excessive trading in order to boost commissions. An investor who believes he has been victimized by such practices will need a forensic expert to analyze the trades made on his behalf. Your stock fraud lawyer will probably use such an expert for this purpose.
Unauthorized Trading and Misrepresentation
Many brokers make trades on behalf of an investor without first securing permission. While he might argue that you, the investor, in effect agreed to such a practice by not objecting at the time, you may have a claim if this occurs. If the broker fails to disclose risk inherent to an investment prior to a purchase, you may have a claim as well. However, you will need to both prove that the misrepresentation occurred, and that it you would have taken a different investment course had you been made aware of the true risks.
Other Kinds of Improper Conduct
There are numerous other types of misconduct that an unscrupulous investor might engage in, such as selling securities and other kinds of investments that are not within the broker’s area of expertise, purchasing for his account before buying for yours, and forgery. Finally, some brokers simply fail to supervise a client’s portfolio adequately.
Work with a Stock Loss Lawyer in Tampa
If you have suffered financial loss due to misconduct on the part of your broker, you may have grounds for a lawsuit. Call a stock loss lawyer in Tampa to discuss your options. Call Savage Villoch Law, PLLC today at (813) 251-4890.