What is Stock Fraud?
Stockbroker fraud is any deceptive practice used to induce you to purchase or sell securities on the basis of misleading, false, or wrong information.
Types of Stock Fraud
Fraud comes in all types and forms, including activities that are not illegal per se, but whose cumulative activities make them fraudulent. For example, if your broker conducts a trade on your account which generates little or no profit, there may not be anything inherently improper or illegal. But if this becomes a repeated pattern, it is possible your broker is making trades or “churning” your account to generate commissions, without regard for whether the trades make sense for you.
Stockbroker fraud also likely occurs when your broker: (a) offers you a “guaranteed winner,” (b) trades without your permission, (c) over-concentrates your accounts in a single security or industry, (d) is negligent, or (e) recommends unsuitable investments for your portfolio.
Brokers must follow your explicit instructions and recommend only those investments that are consistent with you risk profile and investment objectives. If you suspect your broker has failed to meet these obligations or has failed to provide you with accurate information regarding a transaction, you may be the victim of broker fraud.
What Can I Do?
Before you choose a broker check their disciplinary records by using FINRA’s Broker Check tool that will allow you to search by name and firm. Then if you suspect wrongdoing in your account, you should get a second opinion about your broker’s activity by calling a stockbroker fraud lawyer.
Call a Los Angeles Stock Fraud Attorney Today!
If you have lost money in your account and you suspect your broker misled you about the risks of an investment or an investment strategy or otherwise made unsuitable investments, you may have certain legal rights that require your immediate attention.
Contact an experienced Los Angeles stockbroker fraud attorney today for a consultation to discuss your rights and options.