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Suing Your Stockbroker | Colling Gilbert Wright and Carter

Can I Sue My Financial Advisor?

After experiencing a substantial loss in an investment account, you may be wondering about your rights and legal options, namely: Can sue your financial advisor to recover your losses?

Depending on the details of your situation, the answer may be yes. If your financial advisor, or the brokerage firm he or she works for, failed to abide by FINRA’s rules and regulations and you suffered investment losses as a result, you have the right to file an arbitration claim to seek financial compensation.

However, you should not file your claim alone. If you believe you suffered losses due to the negligence or wrongdoing of your investment advisor, you need a seasoned attorney on your side with knowledge and experience in these complex matters. At Colling Gilbert Wright, our securities fraud attorneys will review your case for free, explain your legal options, and determine what steps should be taken to recover the maximum compensation to which you may be entitled.

When Can You Sue Your Financial Advisor?

There are a number of ways in which a stockbroker or financial advisor can fail to honor his or her professional obligations. For example, a lawsuit or arbitration claim may involve an allegation of forged documents or outright theft. In other cases, a negligent broker may direct a person’s investment money into high-risk or inappropriate financial investments in order to collect a higher commission.

At Colling Gilbert Wright, we handle all types of broker negligence and investment fraud cases. Examples of securities fraud can include:

Unauthorized Trading

Brokers must have the legal authority to make transactions on behalf of their clients. If you lost money because your broker made trades that you never approved, you may have been the victim of unauthorized trading; it is in your best interest to speak with an experienced attorney right away.

Excessive Trading (Churning)

 Financial advisors and stockbrokers must have a reasonable, well-grounded basis for executing trades. Unfortunately, some brokers will trade on a customer’s account simply to increase their own fees. This unlawful practice is known as churning.


Brokers must act with a certain level of professional skill. Thrusting clients into investments that are over-concentrated places the investor at considerable risk. Financial advisors can be held responsible for losses that occurred due to a lack of diversification in their clients’ investments.

Misrepresentations and Omissions

A broker has a duty to make honest and fair representations to his or her clients. If a financial advisor fails to act in your best interests, and you lose money because of a misrepresentation or omission, that broker may be held liable for your losses.

Unsuitable Investments

Most financial advisors are held to the suitability standard. This means that they can only recommend and sell financial products that are appropriate for a customer’s specific investment profile. If you suffered a monetary loss in an unsuitable investment, you should speak with a lawyer immediately.

Breach of Fiduciary Duty

Your registered investment advisor (RIA) must always look out for your best interests. Under the Investment Advisers Act of 1940, RIAs owe fiduciary duties to their clients. If you lost money as the result of your RIA’s breach of fiduciary duty, you may be entitled to compensation for the full value of your losses.

You Must Prove Negligence or Fraud to Successfully Sue Your Broker

When a person loses a large sum of money in an investment, he or she may experience worry, dissatisfaction, and anxiety about the future. In the worst-case scenario, an investment loss might entirely devastate a person’s finances. When something like this happens, it’s reasonable to demand justice. However, under FINRA rules and federal securities laws in the United States, an investor cannot hold a broker legally accountable just because money was lost.

Investors must be able to prove carelessness or fraud on the side of the financial advisor in order to prevail in FINRA arbitration or an investment fraud case.

In the most basic terms, investors must demonstrate that their broker, or other financial representative, acted negligently or fraudulently – and that there is a link between the investor’s financial losses and the negligence or fraud.

Although certain cases of a stockbroker’s negligence or a financial advisor’s deception are obvious and relatively straightforward, the vast majority of investment fraud cases are exceedingly complex. To demonstrate negligence or fraud, you need to consult with an experienced attorney who can assist you in meticulously gathering all necessary records, papers, and evidence and presenting it in a convincing, persuasive legal case.

Investment Agreements Often Contain Arbitration Clauses

In many circumstances, an investor does not have the legal right to sue his or her financial counselor or stockbroker. This is due to the fact that the vast majority of today’s investment agreements include a mandatory arbitration provision.

If you signed a pre-dispute arbitration clause in your brokerage company or broker agreement, it will very probably be enforced. This means that, rather than going to court, you must seek justice through the FINRA arbitration process. Fortunately, FINRA arbitration is similar to a mini-trial, and an experienced FINRA arbitration lawyer can assist you throughout every step of the process.

If your FINRA arbitration action is successful, you may be awarded compensation for the full amount of your losses.

While certain aspects of FINRA arbitration are comparable to those of conventional litigation, there are also significant differences. If you are pursuing justice against a negligent broker through FINRA arbitration, you will need the assistance of an experienced attorney who is familiar with the complexities of FINRA’s rules, regulations, and filing criteria.

Contact Our Investment Fraud Lawyers Today

Don’t face your losses alone. If you were the victim of investment fraud, you deserve justice. The experienced legal team at Gilbert Wright & Carter has substantial knowledge in a range of investment fraud cases, and we have helped many investors recover their financial losses.

See some of our recent cases and investigations.

Call (800) 766-1000 today for a free consultation. We serve clients throughout the state of Florida and Nationwide.