Fraud

Fraud occurs when a broker or investment advisor makes a misrepresentation of material fact, including but not limited to:  guaranties, price predictions, or purported special information regarding an important contract, approval, earnings announcement or other newsworthy event.

Misrepresentations and Omissions

A misrepresentation is a false and fraudulent statement made by a broker or investment advisor, for the purpose of inducing a customer to take a desired action with their investments. Supplying false information without reasonable care for the client and for the sake of the broker’s benefit would be a cause of action for misrepresentation. An omission would be the failure to communicate fully and honestly to a client regarding the purchase or sale of securities, risks known or reasonably discoverable by the broker about the investment, the broker's relationship with entities who are making a market in the security, the domination and control of the market for the security by the brokerage firm, the illiquidity of the shares, or the lack of any appreciable assets or operating history of the company.  If a reasonably prudent investor would want to have this information prior to the purchase of the security, then the broker has a duty to provide the information accurately and timely.

If you believe your broker has misrepresented the inherent risks of an investment or has failed to disclose the inherent risks involved in order to make the investment seem more attractive, less risky or more potentially lucrative, contact Fineberg Gresham for advice and experienced representation from attorneys with thorough knowledge of securities law and how to handle securities disputes.

Unsuitability

Brokers have a duty to recommend investments suitable to their clients.  A claim of unsuitability may be brought if a broker fails to take into consideration several factors prior to recommending an investment. Among the factors that must be taken into consideration are the client’s goals, financial situation, net worth, age, income, education, stated investment objectives and prior investment experience and any other securities held.   Additionally, investment may be unsuitable when the broker or investment advisor sells illiquid, excessively volatile or risky securities in violation of the client's goals and investment objectives. 

Investments may be unsuitable when they involve:  excessive risk, overconcentration, illiquidity and/or are otherwise inappropriate for the client’s needs and/or objectives.  After determining the client’s risk profile and investment goals, the investment advisor or broker has a responsibility to investigate the risks of each recommended investment and disclose the risks that the broker knows or should have known before entering into a transaction for that security.   The failure to disclose the known or foreseeable risks pertaining to a particular investment or investment strategy constitutes a breach of duty and is actionable.

Unsuitable securities recommendations can cause serious damage to your financial well-being and put you in a precarious financial situation. If this has happened to you, we can help you recover compensation for the money you have lost. Contact Fineberg Gresham today for immediate legal advice on how you should proceed.

Churning / Excessive Trading

Churning occurs when, in order to obtain commissions, a broker causes securities in a customer's account to be traded with a frequency too great in light of the customer's financial needs, resources or investment objectives.  Churning occurs because many securities brokers play a dual role as both investment advisers and salespersons and because of the compensation system used in the securities industry.  The broker will trade in and out of positions which generate fess for the broker and losses for the clients.  Consent is not a defense to churning especially when the consent is obtained through false pretenses, fraud and/or a failure to disclose all material facts to the client.  If your account has been excessively traded, we can attempt to get back the excessive commissions you incurred, even if the net effect of the trading was profitable.

If you suspect your broker may be "churning" your account, you should contact Fineberg Gresham to fight for your interests.

Negligence, Misconduct and Failure to Disclose Risk

A broker is a trained professional and clients put their investments, their life savings and their futures in the broker's hands. Usually that trust is well placed. Sometimes it is not. When brokers fail to uphold the standards of their profession , when they are negligent, losses could result.  Generally, negligence occurs when the broker or investment advisor fails to act as a reasonably prudent broker and/or investment advisor would act under the same or similar circumstances including making prudent recommendations, disclosing material facts, managing the portfolio in a manner consistent with the client’s objectives and suitability requirements.  Additionally, a brokerage firm has a duty to supervise its brokers and ensure that they comply with all SEC and firm rules and regulations.  When firms do not adequately supervise and/or ensure that the rules are followed, client’s often pay the price as brokers will sell unsuitable investments, churn the account, engage in unauthorized trading, perpetrate fraud and/or mismanage their accounts.  For example, when a broker passes on to his clients his own ignorance of the investment's inherent risks, and losses result, there could be a case against that broker and his firm.

For a free evaluation of your case, contact Fineberg Gresham.

Unauthorized Trading / Discretionary Trading

It is a common requirement that brokers must get their customer's approval before they enter an order. Failure to do so may give rise to liability when losses result. Once you become aware of the unauthorized activity, you should report it immediately; you can't reel in the gains of a known unauthorized trade, and then complain only when the investment turns sour. Every year, unauthorized trading of securities and misguided discretionary trading costs unwary investors tens of millions of dollars.

If you think it’s happened to you, contact Fineberg Gresham today for sound advice and experienced representation aimed at recovering your losses and holding your broker or firm accountable for their actions, whether through arbitration, mediation or in rare instances, court.

Breach of Fiduciary Duty

Some brokers can be held to an even higher standard—a fiduciary of your accounts and funds. The circumstances under which a fiduciary duty can be imposed on your broker depend on the facts of your particular case.  If you are an investor who believes a broker or brokerage firm has demonstrated a breach of fiduciary duty, contact Fineberg Gresham today for practical advice and experienced representation from attorneys with thorough knowledge of securities law and handling securities disputes.