Yes. If your investment account has suffered losses due to the negligence or wrongful actions of your financial advisor, you may bring a lawsuit to recoup full and fair compensation. To legally work in the securities industry, a financial advisor must be properly licensed. With a license comes many different legal obligations, including the duty to follow SEC regulations, FINRA regulations, federal law and any applicable state law. Additionally, any brokerage firms that operate in the financial industry are also held to similar obligations.
Did My Financial Advisor or Stockbroker Break the Law?
Often, it can be difficult to determine exactly when a legal violation has actually occurred. As such, if you feel that you were in any way cheated or misled by your financial advisor, you should contact an experienced investment fraud attorney to set up an immediate and comprehensive review of your case. Financial advisor misconduct is typically highly complex and it can arise in numerous different forms. Some of the most common examples of financial advisor misconduct that we deal with includes:
- Negligence: Investors have a fair and reasonable expectation that they will receive competent advice when they consult their financial advisor. If their financial advisor fails to live up to that expectation, and if the investor suffers financial losses as a result, negligence has occurred.
- Misrepresentation: A financial advisor has a legal duty to give and honest and fair representation of all investment opportunities to current or prospective clients. If a financial advisor twists the facts related to an investment opportunity or if they leave out any key information, an investor can suffer serious financial damage as a result. This is a common form of fraud and the responsible financial advisor must be held accountable.
- Unsuitable investments: Not all investment opportunities are appropriate for all investors. A financial advisor has a professional duty to collect and analyze information about their clients in order to assess the worthiness of prospective investments. Relevant information can include a client’s age, their net worth, their expected future income, their long-term goals and their risk tolerance. Using this information, a financial advisor must then refrain from recommending any unsuitable investments.
- Unauthorized trading: Unauthorized trading occurs when a financial advisor or stockbroker makes a trade on a client’s account without first receiving approval. If your financial advisor is trading without your permission, you should take immediate legal action.
- Churning: Many financial advisors are paid through commissions or other investment fees. Under this model, financial advisors can sometimes increase their own pay simply by conducting more trades on their customer’s account. The net effect of this excessive trading, also known as churning, is to transfer money away from the customer and over to the financial advisor. Churning is financial advisor malpractice.
Contact Our Office Today
At the Sonn Law Group, we dedicate our practice to protecting the rights and interests of investors who have been damaged by the misconduct of financial advisors and stockbrokers. If you or a loved one has been the victim of investment fraud, please call our team today at 1-844-689-5754 to set up a free review of your claim. From our primary office in Miami, we protect investors through the United States, Mexico and South America.