When working with a stockbroker, you are entrusting them with a large amount of financial information. In some cases, you may be relying on them to help you build your retirement funds. Unfortunately, stockbroker misconduct happens throughout the country. When it occurs, investors can end up with substantial financial losses.
The national securities and investment fraud law firm, Levin Law, P.A. (“Levin Law”), provides experienced representation for victims of stockbroker misconduct. If you have suffered financial losses as a result of a stockbroker who was negligent or acted in bad faith, you might be able to take legal action.
One of the most common signs that you have the wrong broker is if their only investment recommendations involve transactions with high fees or commissions. If your broker is basing decisions solely on the commissions, they may not be making investments that are in your best interest.
In order to avoid being caught by surprise, make sure that you fully understand any fees that the brokerage will be charging, as well as any commissions that are earned for each investment. Check your statements regularly, and do not be afraid to ask questions.
Another potential red flag is if your broker is engaging in excessive trading, known as churning. Stockbrokers may engage in churning in an effort to generate additional commissions, particularly if they have the authority to act without your authorization on each transaction. Churning is illegal and usually a sign that your broker is breaching their fiduciary duty.
Communication is key in a broker relationship. If you struggle to get a hold of your broker, you need to consider making a change. This isn’t to say that a broker needs to be available 24/7, but they should return any calls or emails within a reasonable period of time. With investments, things can happen quickly. Having someone there to make transactions can prove critical to avoiding losses.
If your broker is making investment recommendations that are unsuitable based on your situation, you need to find a new broker and report the issue. Making unsuitable investment recommendations can cost an investor everything.
To avoid this, you need to research any investment recommendations made by your broker to ensure that they are in your best interest based on your financial situation and future goals. If the recommendation presents an inordinate amount of risk, do not be persuaded into doing it.
Finally, if your broker has had prior customer disputes, you should reconsider whether they are the right fit. The Financial Industry Regulatory Authority (FINRA) regulates brokerage firms and their representatives.
You can make an informed decision before using a broker by checking FINRA’s BrokerCheck. A BrokerCheck report will provide you with detailed information, including whether the broker has previously been suspended, if there are any current or settled customer disputes and their employment history.
If you suspect that you were the victim of investment fraud or broker misconduct, contact our office to schedule a free, no-obligation case evaluation. Most cases are handled on a contingency fee basis, meaning clients are not obligated to pay Levin Law attorney fees unless money is recovered on their behalf.
Levin Law is a premier national cryptocurrency, securities, commodities, futures, and class action law firm. Brian Levin, Levin Law’s founding attorney, has helped recover in excess of $150,000,000 through arbitration and litigation for individual and institutional investors throughout the country and the rest of the world. Levin Law represents retirees, individual investors, high-net-worth investors, ultra-high-net-worth investors, institutions, family offices, trusts, publicly held companies, and others.