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Common Misconduct Claims

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Experienced Attorneys in Securities Arbitration Matters

This list is not all-inclusive but is intended primarily to assist investors in recognizing whether they may be able to recover their investment losses. Consultation with an attorney experienced in securities arbitration matters is recommended for those who believe they may have suffered losses as the result of investment misconduct.

Inappropriate Recommendations

A broker and adviser’s first duty is to know the investor - to acquire necessary information about the investor's financial situation, investment goals and objectives, future needs, age, sophistication, investment experience, and risk tolerance in order to recommend investments that are in the client’s best interest. Brokers and advisers must continuously reevaluate the needs of their investor clients to maintain that their recommendations are in the client’s best interests.

Breach of Fiduciary Duty

It is common for investors to put their complete trust and confidence with a financial professional based on his stated expertise and superiority of knowledge in the area of investments and money management. Like doctors and lawyers, we typically rely on financial professionals to look after our best interests. Brokers and their firms can be held responsible for abusing the investor's trust and confidence and breaching their fiduciary duties.

Churning

Churning occurs when a broker buys and sells securities in an investor's account with excessive frequency solely for the purpose of generating commissions. To establish churning, the investor must establish that the broker had control over the investor's account to make the transactions, that the transactions were excessive, and that the investor suffered damages as a result.

Fraud or Theft

The most blatant of unlawful tactics is fraud or outright theft by a financial professional. An example of theft is the case where the financial professional instructs an investor to write a check payable to him personally or to some company that the broker or adviser controls. Sometimes, financial professionals forge signatures on customer accounts and make withdrawals. Investors should take all possible precautions when seeking the assistance of a financial professionals, including checking his and the firm's credentials.

Failure to Supervise

Brokerage and advisory firms must must diligently supervise their agents and their clients’ accounts. If firms fail to properly supervise, and investment misconduct and losses result, the firms may be held liable for their negligent supervision.

Registration Violations

Under federal securities laws and state "blue sky" laws, brokers and brokerage firms must be registered to sell securities to residents of their states. In addition, most states require that the securities sold to their citizens be registered or properly exempt from registration. The sale of an unregistered and non-exempt from registration security is a violation of state and federal laws.

Meyer Wilson
Meyer Wilson
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The information contained in this Website is provided for informational purposes only, and should not be construed as legal advice on any subject matter. Read More
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