Typical Claims
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Breach of Fiduciary Duty
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| Like a doctor or a lawyer, brokers owe their customers heightened duties of care in various situations. When recommending the purchase or sale of securities, or when recommending an investment strategy, your broker must consider your interests above his own and act accordingly. |
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Churning/Excessive Trading
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| Churning is illegal conduct whereby a broker trades your account in excess of goals and norms, typically for the purpose of generating commissions. |
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Failure to Disclose Information
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| In many cases, we see improper conduct whereby the broker or his employer firm fails to inform a client of material facts concerning an investment, conflicts of interest, or an advised strategy. |
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Failure to Supervise, Failure to Train
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| Brokerage firms are required to educate and supervise the sales practices of their brokers, including those brokers who appear to operate independently in remote offices. Many times we see situations where a firm neglects to supervise or properly train its brokers as to products sold or as to obligations owed to you. |
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Asset Allocation and Failure to Diversify
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| When recommending an asset allocation for you, your broker or financial advisor has a duty to learn about your current and future financial goals, your investment experience your risk tolerance, and other material facts. In many cases, he also has a duty to recommend diversification of concentrated securities holdings. |
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Misrepresentations and Omissions
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| Brokerage firms and brokers have affirmative obligations to truthfully disclose material facts concerning themselves, and the investments or strategies recommended to clients. "Half-truths" concerning material facts do not suffice. |
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Private Placements
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| Private placements are typically sold to a limited number of investors, and give companies the ability to raise capital without undergoing public registration. Typically these securities are unregistered and fraught with risk. Yet, the improper sale of these securities to unaccredited investors has been on the rise. |
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Unauthorized Trading
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| When a broker executes a trade in your account without your prior consent or contractual agreement, he has violated industry rules and may be liable for losses you suffered. |
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Unsuitability
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| This claim arises from a broker's failure to learn essential facts about the security or strategy he recommends, and/or his failure to recommend investments in accordance with your goals, needs and risk tolerance. Regulators that oversee broker conduct require that broker recommendations by suitable for you. |
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