Can You Sue Your Stockbroker?
When investing your money, you’re likely doing so with an eye on the future. Whether you are planning for a child’s education opportunities, for a major purchase (like a home), for your retirement, or are simply investing for fun, your objective is to make money, not lose it. But what happens if you lose everything? Can you sue your stockbroker or financial advisor to recover your losses?
The answer can be yes, but only if your losses are the result of wrongdoing by your stockbroker, investment firm, or advisor. If the individual or entity you trusted with your money is negligent, commits securities fraud, or otherwise acts unethically, you may be able to seek recovery through a lawsuit or, more likely, FINRA arbitration.
The experienced stockbroker fraud attorneys at Colling Gilbert Wright & Carter have extensive experience in these complex matters. We can help you determine if you have a claim, and fight to get your money back.
Can I Sue My Stockbroker for Negligence?
The short answer is yes, but the manner in which you seek recovery may not be what you expect. In most cases, you cannot technically sue an investment firm or stockbroker. Based on your agreement, you will likely need to address your claim via securities arbitration through the Financial Industry Regulatory Authority (FINRA). Stockbrokers and stock dealer firms are registered with FINRA, a self-regulatory organization (SRO) that regulates brokers and enforces the rules which govern the brokerage industry.
Original account agreements for most investors include an agreement that any potential disputes or claims related to their accounts be submitted to FINRA for arbitration. In some cases, even if you do not have a signed arbitration agreement, you may still bring your claim to arbitration by virtue of the other party’s FINRA membership.
FINRA arbitrators are not judges. They are not bound by precedent, and not limited by rules of evidence or civil procedure that govern court cases. Decisions made by arbitrators should, for the most part, be considered binding and final.
When Can a Stockbroker or Financial Advisor Be Held Liable?
Stockbrokers, investment advisors, and other financial advisors owe a fiduciary duty to their clients. This means that they owe a standard of care which requires them to:
- Execute their professional duties with a high level of skill and care
- Place the interests of their clients above their own
- Act in their client’s best interest
When financial advisors fail in their fiduciary duties, they are guilty of negligence. If your stockbroker’s breach of fiduciary duty contributed to your monetary losses, he or she may be held liable for your damages.
What Constitutes Stockbroker Negligence?
Stockbroker negligence can occur in a number of ways, including but not limited to:
- Misrepresentation and omission: This involves intentionally misleading a client, whether through omission or misrepresentation, which affects your decision to invest.
- Unauthorized trading claims: With a few specific exceptions, brokers must obtain a client’s explicit permission before making any trade on his or her account.
- Excessive trading, or “churning”: This can occur when brokers make an excessively large number of stock trades on behalf of clients, regardless of whether those trades are profitable or not.
- Over Concentration: Portfolio diversity can help mitigate loss and limit risk. Investment overconcentration in a single type of security or asset class can be grounds for negligence.
When investors suffer monetary losses due to the negligent or fraudulent actions of their financial advisors, they may be able to recover damages for their losses from the financial advisor, the brokerage firm, or both. Our attorneys can discuss the merits of your claim and determine if you have a case.
Do I Need a Stockbroker Fraud Lawyer to Pursue My Claim?
Although you are not legally required to hire a lawyer to represent you in a stockbroker fraud dispute, it is in your best interests to do so. Investment fraud disputes can be incredibly complex, and difficult to navigate on your own.
If you’ve suffered significant investment losses and your future is on the line, you deserve exceptional legal representation to help maximize your recovery.
Call Our Orlando Stockbroker Fraud Attorneys Today
If you have been the victim of broker negligence or stockbroker fraud, you deserve compensation for your losses. These claims are often very complicated, and it can be challenging to win your case and obtain the full and fair compensation you deserve. You should expect that the financial advisor or brokerage firm will fight aggressively against any allegations of wrongdoing or incompetence. It is crucial to work with a knowledgeable stockbroker fraud attorney who has the skill, resources, and experience necessary in these complex cases.
Colling Gilbert Wright & Carter has helped hundreds of investors recover money in FINRA and other securities arbitrations. We are ready and standing by to help you achieve the justice you deserve.
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Call (407) 712-7300 today for a free consultation with an experienced securities arbitration lawyer in Florida. We serve clients across the state, including Orlando, Tampa, Miami, and nearby areas.