Violations of Securities Laws

Both your broker and the firm with which the broker is registered are governed by laws intended to protect you, the investor. These laws restrict what they sell, how they sell it, and to whom. If you have suffered significant losses based on broker misconduct, the broker and the firm likely have violated multiple securities laws in the course of their misdeeds. Broker misconduct includes inappropriate practices such as churning, lack of due diligence, negligence, Ponzi scheme, breach of fiduciary duty, breach of promise/contract, high-risk investments, and selling away.

Investors must be able to trust their brokers because brokers have significant responsibilities in managing their clients’ assets. Brokers and brokerage firms must comply with the guidelines of the United States Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) and must comply with federal and state laws. This means that your broker must engage in activities that are in your best interest. High risk investments, churning, selling away, and lack of due diligence are bad practices that frequently result in stockbroker fraud. Investors are not expected to have a working knowledge of all aspects of their brokers’ legal responsibilities due to extensive regulations, rules, and laws. Investors, however, can spot red flags and obtain professional legal help when they become suspicious that their brokers are committing financial fraud. Professional legal counsel is needed to discern all of the legal and regulatory violations that brokers may have committed. To gain a better understanding of the potential red flags, see the following descriptions of some of the most frequent types of violations, and contact us immediately if you believe any of these apply to you. You may have grounds for a securities law claim to recover losses, and we are here to help.