Making investments is considered a smart and tactful step, as it could help one to improve their finances. Nonetheless, it can be a tricky game, as the market is always changing and bad investments can happen. Any rational investor understands that markets do not always go up and if you do decide to invest in the stock market you will at some point suffer losses. The fact that the market goes up and down is a healthy thing. However, what can make someone ill is when the cause for financial losses is due to misconduct by a trusted stockbroker. All to often when brokerage firms are confronted with misconduct, they turn a blind eye and the only remedy is for the victim to resort to securities litigation or securities arbitration to force the brokerage firm compensate their victimized client for losses resulting from the brokerage firm’s employee.
Causes for a claim
When brokers occupy a unique position of trust and confidence with investors or when they exercise discretionary trading authority over a client’s account, they have a fiduciary duty. When this duty is breached, and damages result, the victimized client has a valid claim. Additionally, if, as is often the case, there is a conflict of interest between the investment advisor/brokerage firm and the client, this could be problematic.
Certain conduct such as churning, which is excessive trading to boost the commission of the broker, the failure to properly diversify, the failure to supervise, brokerage malpractice, utilizing insider information, market manipulation, misrepresentation, the omission of facts, making risky investments, trading without the permission of the investor or making unsuitable investments and/or investment strategies are all forms of misconduct. If these or similar conduct has occurred, it may be possible to file a securities litigation claim.
While investments do not always yield the return that individuals in New York and elsewhere desire, the reality is that these losses should not be due to the misconduct of the broker in charge of one’s investments. Thus, if such a situation arises, one may be able to file a claim. This not only brings light to the misconduct but also allows the investor to seek a resolution to address the losses suffered.
It may be difficult to spot when misconduct occurs in the world of investments. It can be a complex area even for seasoned investors. Thus, it is imperative that one consults in a seasoned and proven securities attorney to discuss what options that are available to them if such misconduct is suspected. This can help shine light on the matter, helping an investor take proper actions to better protect his or herself.