When your financial advisor or broker encouraged you to invest in risky ventures that devalued your assets, or acted without your knowledge, it is referred to as securities fraud or stockbroker fraud. In some cases, securities or stockbroker fraud victims may be able to recover some or all of their losses. Call Sokolove Law today or fill out the form to the right if your broker advised you to engage in any of the below types of fraud:
Types of Fraud
You have the right to expect your financial advisor to act in your best interest. Understand the ways in which your savings could be at risk:
- Unsuitable Recommendations: Your broker hard sells a risky investment even though you didn’t want it – convincing you with potentially false promises of massive returns. This would be considered an “unsuitable recommendation.”Your broker hard sells a risky investment even though you didn’t want it – convincing you with potentially false promises of massive returns. This would be considered an “unsuitable recommendation.”
- Overconcentration: Your advisor invests most or all of your money in one type of asset or a few high risk stocks regardless of your desires resulting in significant financial losses.
- Misrepresentation or Omission: Misrepresentation or Omission occurs when your financial advisor highly recommends a risky investment, such as a startup with potentially large returns, but fails to explain the substantial risks involved. Or they fail to disclose that they have been previously disciplined by a financial licensing board.
- Failure to Execute: Your broker fails to sell promptly, refuses to sell, or strongly argues that you keep the security, even after you have made that request.
- Churning (Excessive Trading): Your broker makes excessive trades within your account to generate commissions regardless of your investment goals.
- Selling Away: Your advisor recommends an investment that is not offered directly by their firm, which scrutinizes products for legitimacy. This is called “Selling Away.”