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When to Hire a Stockbroker Fraud Attorney

If you believe you may have been the victim of investment fraud, it is important to discuss your situation with an experienced stockbroker fraud attorney as soon as possible. An attorney who focuses on these types of claims will understand the law and how it applies to your situation. 

Colling Gilbert Wright & Carter has substantial experience in a wide range of investment fraud claims. We are dedicated to helping our clients recover their losses and holding wrongdoers accountable for their actions.

Below are examples of when you may consider contacting s stockbroker fraud attorney.

If Your Stockbroker Intentionally Misled You

Misrepresentation and omission involves the intentional misleading of a client, whether through misrepresentation or omission, which affects an individual’s decision to invest.

Under both state and federal securities laws, stockbrokers are prohibited from making false claims or otherwise failing to disclose investment information accurately. Not only does this include providing false information, but it can also include withholding pertinent information that could affect a client’s investment decisions. When a stockbroker violates these laws, it is often in an attempt to manipulate the market and achieve personal gain. A corporation may make a misrepresentation to over-represent its profits.

If Your Stockbroker Made Trades Without Your Permission

Unauthorized trading claims are prohibited. With very few exceptions, a broker must obtain the explicit permission of his or her client before making a trade on their account.

An unauthorized trade can involve the sale or purchase of securities without a client’s expressed consent. If a client does not agree to give his or her broker discretionary authority – whether in the context of a margin account or in an original agreement or an amendment to the agreement – the stockbroker does not have the legal authority to make any trade on the client’s behalf.

A broker may make an unauthorized trade for a number of reasons. Most often, however, unauthorized trading is done for personal gain rather than the client’s best interests. Because of this, it is crucial for investors to review each of their account statements closely. This will help to gain a clear picture of your investments and help you detect potentially fraudulent activity more quickly. The sooner you can identify fraud, the sooner you can mitigate and recover your losses.

If Your Stockbroker Made Excessively Numerous Stock Trades

Excessive trading, or “churning” occurs when a broker makes excessively numerous stock trades on behalf of a client, regardless of the profitability of those trades.

Churning typically occurs when a broker is given permission to trade on a client’s account at his or her discretion. When a client is not required to approve every individual trade the broker is trusted to make trades exclusively in the client’s best interest. Churning is less likely to occur in cases where a client must give permission for each trade because they oversee each trading decision personally.

Similar to identifying other types of securities fraud, it is essential to review your account’s growth closely and decide if your profits are enough to cover your trading expenses sufficiently. Sometimes, even one unnecessary trade could be considered churning if it does not serve a real purpose. When pursuing a claim of churning, the claim will be assessed in light of risk tolerance, income, and tax needs. Once the size and number of trades that were made have been evaluated in regard to the way your account was set up, a decision can be made whether or not churning occurred.

If Your Stockbroker Overconcentrated Your Investment

Overconcentration occurs when a stockbroker invests excessively in a single security or asset.

Portfolio diversity is beneficial for mitigating losses and limiting risk. When an investment portfolio is sufficiently diverse, individual investors are more protected from sustaining extreme losses.

Common types of overconcentration include:

  • Investing in just a single type of asset class or security. To mitigate risk, it is best to include a variety of investment types in a stock portfolio. This can include bonds, preferred stocks, and common stocks.
  • Investing excessively in a single market sector. This can leave investors vulnerable to taking disproportionate losses with normal market fluctuations. For example, if a broker invested unreasonably high in a dot-com type of company during a period when that market was starting to fail. However, failure in more limited markets can be just as devastating to over-concentrated investors.
  • Investing an excessive percentage of a portfolio in only one company. This can leave investors at risk of suffering extreme losses if the company experiences difficulties –  even if those difficulties were not predicted.

Contact Our Stockbroker Fraud Attorneys Today

If you suspect that you are the victim of stockmarket fraud, it is important to take action promptly. The stockmarket fraud attorneys at Colling Gilbert Wright & Carter have the experience, resources, and knowledge required to handle these complex cases and assist investors in recovering their financial losses. Our accomplished lawyers are dedicated to helping our clients achieve justice.

Call (800) 766-1000 today for a FREE consultation. We serve clients throughout Florida and Nationwide.