When you put money into an investment account, you want to make sure that it is safeguarded. These four steps to preventing stockbroker fraud can be taken in an effort to avoid stockbroker fraud and to make sure that you do not become the victim of an unscrupulous broker.
Investigate Your Broker’s Background
The Financial Industry Regulatory Authority (FINRA) has a handy BrokerCheck tool that allows you to check out your broker. You can find out if any complaints have been lodged, what the status or results are, and whether the broker has ever been fined or suspended. If your broker isn’t listed, this likely indicates that he or she is not properly licensed to sell securities and you should be avoid investing with that broker.
Review Account Information Very Carefully
When you open a brokerage account, forms are completed to document your risk tolerance, your investment objectives, and your net worth. Make sure that these forms are completed accurately, as your broker’s supervisor can use these documents as a benchmark against which to compare the investments and investment strategies that your sells to you. Even if your broker completes these forms for you, make sure that you review them for accuracy.
Review Your Statements and Address Suspicious Activity Immediately
Take the time to review your monthly account statements and any trade confirmations that you receive. If you notice something awry or if you do not understand any of the transactions, you should immediately contact your broker or brokerage firm. Any delay in doing so can lower your ability to bring a viable claim for investment fraud or stockbroker misconduct. If something looks wrong, address it immediately and make sure that you document your concerns in writing. Importantly, don’t simply rely on your broker if you have serious questions about your account. A broker who is committing wrongdoing likely would not admit that to you. Seek an independent review of your account from another broker or by an investment fraud lawyer.
Close Your Account
If you believe you have been the victim of stockbroker misconduct or securities fraud, you should close your account immediately before anything else can happen. Find a new broker – and a securities fraud lawyer – and gather evidence of the potential misconduct.
More Information on Stockbroker Misconduct
For more information on unauthorized trading and common investor problems, you can also consult the FINRA website.
Call a Los Angeles Securities Fraud Attorney Today
While stockbroker misconduct cannot always be prevented, there are certain remedies for victims of securities fraud and misconduct, including filing a FINRA arbitration claim to recover your investment losses.
Contact an experienced Los Angeles securities fraud attorney today for a consultation to discuss your rights and options.