What Constitutes Stock Broker Fraud?

Stock broker fraud, also known as investment fraud, occurs when a financial professional or firm offers incomplete, inaccurate or biased information that ends up benefiting the adviser or firm and not the investor. A single individual can commit this type of fraud or it may occur on a corporate level and can run the gamut of investments from penny stocks to multi-million dollar trades. All investment professionals are legally bound to exercise due care when representing the interests of their investors. When a broker fails to meet financial industry standards of care and harms an investor’s interests, the investor can make a claim against the individual or firm for professional negligence and fraud with the help of a Florida stock broker fraud attorney. Stock fraud practices can include:

• Misrepresenting or omitting risk factors associated with an investment
• Pressuring a client to buy into an unsuitable investment that ends up in a substantial loss
• Over-concentrating investments in a single area and avoiding diversification and the protection that comes with it
• Processing a large number of transaction by selling stocks with small gains to show profit
• Failure to place client orders when requested
• Unauthorized trades
• High pressure tactics

If you believe that your investment adviser has made your interests secondary to his or her financial gains, you may be a victim of stock fraud. These practices not only hurt you, but can also cause substantial damage to the stock market itself. The Securities Exchange Commission has established guidelines to help ensure fair and consistent investment advice. Contact us to discuss a possible case and the litigation options available to you.