Questions About Stockbroker Fraud

Representing Investors Nationwide

What are a stockbroker’s obligations?
stockbroker or other financial professional has a duty to protect your interests over his or her own and to exercise care and caution with your investments.

Who decides what is fraud and what fraud isn’t?
Stock brokers are regulated by state and federal laws and both the New York Stock Exchange (NYSE) and the National Association of Securities Dealers (FINRA (formerly NASD)) set forth their own guidelines for professional behavior.

What are securities?
Securities describes two categories of investment: Stocks, which represent a share of a corporation, and bonds, which represent a loan to a corporation. Stockholders net gains and losses according to a company’s financial success. Investors who hold bonds can expect full repayment of their loans and may earn interest according to the terms of the bond.

What constitutes fraud?
Fraud describes any intentional or grossly negligent behavior on the part of a stockholder or other financial professional that serves primarily to benefit the broker rather than the client.

What is securities fraud?
Securities fraud is when a financial professional or corporation illegally manipulates the investment market usually in a way that harms clients.

What is investment fraud?
Investment fraud describes deceptive attempts to control the financial market or attract clients including offering advice intended to enrich the broker rather than the client or unwise or incompetent investment advice.

What recourse is available if I’m a victim of securities fraud?
Depending on the specifics of your case, you may have recourse through mediation, arbitration, or through the court system.

Many broker agreements will specify that disputes must be settled through binding arbitration rather than through the courts. Regardless of your situation, however, your first step should be to consult with an experienced attorney who represents individual investors. He or she can help you determine whether you have a case for securities fraud, and if so, how you can go about being compensated for your losses

Is the arbitration process fair to individual investors?
Many people assume that the arbitration process will be unfairly swayed toward stockbrokers and brokerage houses. Fortunately, this is not always the case. According to the publication The Securities Arbitration Commentator, 80 percent of all arbitration cases are settled in the investor’s favor before an arbitrator issues a ruling, and over half of the cases that remain are settled in favor of the investor.

If you or someone close to you believes you have been a victim of fraud, please call our stock broker lawyers today to speak with an experienced securities fraud attorney. We can help you determine whether you have a claim that can be taken to FINRA (formerly NASD) arbitration and then we’ll fight to get your money back.