If you were a victim of stockbroker fraud or broker negligence, you are entitled to full and fair compensation for your financial damages.
Unfortunately, actually obtaining that compensation can be incredibly challenging.
Not only is the claims process complex, but you can expect that the defendant (a brokerage firm and an advisor) will fight back aggressively.
To get started in the claims process, you first need to know who exactly you should bring a claim against. Do you have a valid complaint against your financial advisor? You could.
Do you have a valid complaint against your brokerage firm? You could. In fact, you could even have a valid claim against both your individual advisor and your firm at the same time.
At the Sonn Law Group, our top-rated securities fraud attorneys are committed to protecting the legal rights and financial interests of investors. We want to make sure that all investors have the legal knowledge they need to take action to protect themselves. Here, we help to untangle the complicated web of overlapping liability for financial advisors and brokerage firms.
Issues with your brokerage firm or advisor? We want to hear about it:
When Can Your Brokerage Firm Be Held Liable?
Liability for your investment losses may not be solely limited to your financial advisor.
Your brokerage firm may also potentially be legally responsible for their misconduct. First and foremost, brokerage firms can be held legally liable for their own negligence.
In some cases, the brokerage firm’s negligence will be a key factor that allows an individual financial advisor to commit fraud.
For example, if a brokerage firm did not have the proper supervisory system in place, the company could potentially be held liable for any misconduct committed by its financial advisors that would have been detected and prevented had the proper protocols been in place.
Additionally, under Section 20(a) of the Securities and Exchange Act, brokerage firms can often be held liable for the negligence of their individual financial advisors.
This section of law includes what is known as Control Person Liability standard.
Essentially, the law holds that brokerage firms are liable for the misconduct of their representatives unless the firm acted in good faith and did not indirectly induce the misconduct.
Applying the Control Person Liability standard to real-world cases can be extremely challenging.
As such, you should consult with a skilled legal advocate before bringing a claim.
When Can Your Your Financial Advisor Be Held Liable?
Financial advisors (stockbrokers, investment advisors, etc.) owe fiduciary duties to their clients.
A fiduciary duty is the highest standard of care under American law. Ultimately, your financial advisor has a responsibility to:
- Act in your best interests;
- Put your interests above their own interests; and
- Execute professional duties with a high level of skill and care.
If a financial advisor falls short of their fiduciary duties, for any reason, then they are guilty of negligence.
When financial advisor negligence contributes (in some manner) to an investor’s monetary losses, then that financial advisor can be held legally liable for the damages.
In the investment world, negligence comes in many different forms. From offering unsuitable investment recommendations or unauthorized trading to churning or over-concentration of investments.
The bottom line: If you lost a significant amount of money because of the fraudulent or negligent actions of your financial advisor, you can and should bring a legal claim against them. They can be held legally liable for your losses.
Find out Who Can Be Held Accountable for Your Investment Losses
If you are an investor who has been wronged, it is imperative that you are able to identify every party that may potentially bear some of the liability for your losses.
This is one reason why you should consult with a qualified investment fraud lawyer as early on in the claims process as possible.
Your lawyer will be able to initiate a comprehensive investigation into your specific case. All parties that either contributed to or benefited from your illegitimate losses must be investigated.
From there, your lawyer can help you bring legal action against all parties that owe you financial compensation.
Contact Our Brokerage Firm Fraud Attorneys Today
At Sonn Law Group, we are proud to be aggressive advocates for investors throughout the United States.
If you lost money because of a negligent financial advisor or a negligent brokerage firm, we can help you hold the responsible parties legally liable for your investment losses.
To get a free, no obligation review of your claim, please do not hesitate to contact our law firm today.
Learn Your Rights
If you’ve suffered significant losses in your investment accounts, talk to a lawyer who will explain your rights and options, free of charge.