Seven Reasons You May Need a Stock Fraud Attorney

When you have a stockbroker handle your investments, you expect that this person won’t violate legal and ethical standards. But sadly, this isn’t always the case, and below are several reasons you may need to hire a stock fraud attorney. Misrepresentation or Omissions In order to know when to buy or sell an investment, clients need enough information from their broker in order to make a sound decision. However, some brokers fail to reveal important facts or they make false claims such as “I have an inside tip.” Brokers can potentially be held liable if clients make poor investments based on misrepresentation or omissions. Not Following Instructions Brokers are typically required to follow a client’s instructions when it comes time to buying and selling stock. If a broker fails to do so, this is often grounds for the client to recover losses. Unauthorized Trading This means the broker bought or sold securities without a client’s verbal or written permission. Negligence Brokers are negligent when they fail to act in the same manner that a reasonable and prudent broker would have acted given the same set of circumstances. Concentration A broker should recommend that a client’s account be diversified among several different investments, classes, and industries. A broker who does not properly recommend diversification can find themselves liable for at least some of a client’s losses. Unsuitability This term refers to a broker’s failure to make recommendations based on a client’s needs, objectives, and risk tolerance. Failure to Supervise By law, brokerage firms must supervise and regulate their brokers as well as routinely review their activities. When a broker is found guilty of stockbroker fraud, the firm may also be responsible for the investor’s losses. If you think you have been the victim of stock fraud, please contact us today for a free consultation.