Not every unsuccessful investment is the result of a breach of fiduciary duty. Even the most ethical and conscientious stockbroker may make decisions that cause losses for his or her clients. In order to establish a valid claim of breach of fiduciary duty, the broker must have discretionary authority to make decisions regarding your investments.
What is Fiduciary Duty?
Fiduciary duty is a central tenet of the financial industry. It describes the ethical standards that financial professionals such as stockbrokers are held to when they take on the responsibility of handling your money. This fiduciary duty obligates your broker to take into account your best interests-including your tax obligations, risk preferences and tolerance, income goals, and other factors-when making investment decisions on your behalf.
What is a Breach of Fiduciary Duty?
One of the most common claims associated with securities, breach of fiduciary duty is established by the broker’s actions, rather than the performance of the investments. In most cases of stockbroker fraud, breach of fiduciary duty is assumed. For example, if your stockbroker over concentrates your portfolio or makes inappropriate recommendations, specific claims can be brought for those actions in addition to the overriding claim that the broker breached his fiduciary duty through the violation of trust and failure to protect your interests as an investor.
If you or someone you know believes your stockbroker has violated his or her fiduciary duty in handling your investments, please call our stock broker fraud attorneys. Your attorney will review your portfolio with you at no cost to determine whether you have a claim and, if you do, we’ll fight to get your money back.