Despite how their services are advertised as “putting your interests first,” there is a striking difference between the positions brokerage firms take when soliciting customers and those they take when those customers arbitrate claims against the same firms. See, Advertising Like Doctors, Arbitrating Like Used Car Salesmen: “Huge Disconnect” Seen Between Brokerage Ad Claims and Tactics Used to Fight Aggrieved Investors.”
However, as is the law in approximately 37 states, as a general matter, all or substantially all claims against stockbrokers and investment professionals, including churning, unauthorized trading, the sale of unsuitable investments, the sale of defective financial products and even the failure to supervise, can be characterized as a breach of fiduciary duty, and specifically, the duty of due care, the duty of loyalty, or the duty of candor.
For example, in the case of churning or excessive activity, which is an express violation of FINRA Conduct Rules, the real claim can be fairly characterized as the broker affecting excessive transactions in a customer account, not with the intention of further the customers interest or investment objective, whatever that investment objective maybe, but instead with the intent of furthering the broker’s own financial or pecuniary interest.
The same may be said regarding the suitability, both “reasonable basis suitability,” in that the broker or the brokerage firm conducted sufficient due diligence and product knowledge to reasonably understand that features of any particular investment, and “customer-specific suitability,” in that given the understanding of any particular investment, for what specific customer may this investment be suitable. Under such circumstances, the failure to perform due diligence, or the wrongful or unsuitable recommendation of otherwise risky investments to specific customers for whom these investments may not be suitable, can really, in all practicality, be seen as recklessness or the breach of the duty of due care.
Common Claims Against Stockbrokers Include:
- Boiler Room Sales
- Breach of Fiduciary Duty
- Conflicts of Interest
- Elder Abuse
- Excessive Trading
- Failure to Conduct Due Diligence
- Failure to Disclose Risk
- Failure to Diversify
- Failure to Execute
- Failure to Supervise
- Failure to Warn
- False Statements and Omissions
- Financial Suicide
- Margin Account Fraud
- Stockbroker Negligence
- Negligent Retirement Planning
- Over Concentration
- Retail Bank Customer Referrals
- Unsuitable Investments
- Selling Away
- Stockbroker Theft
- Unauthorized Trading
- Wrongful Management Referral
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at stockbrokerfraud.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com