Stockbroker Fraud

What is Stockbroker Fraud?

Stockbroker Fraud is securities misconduct or abuse of fiduciary trust on the part of a broker or financial advisor, which may result in significant financial loss of savings or retirement funds. Losses of $50,000 to $300,000 have been frequently reported. Stockbroker fraud is a violation of U.S. securities law and can be grounds for a lawsuit.

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The following are examples of Stockbroker Fraud:

  • Churning – engaging in excessive trading in an account in an effort to generate commissions
  • Failure to execute – failing to execute a client’s order in a timely manner
  • Selling away – recommending to a client an alternative investment that is offered by a person or entity other than the brokerage firm and has not been reviewed, approved or recommended by the firm
  • Making unsuitable recommendations – advising an investor to purchase, sell or exchange a security that is not suitable given the client’s financial situation and needs
  • Overconcentration – recommending or failing to diversify a portfolio that is over-concentrated in a small number of stocks or one asset class
  • Misrepresentation and omission – knowingly offering inaccurate, incomplete, or biased information or omitting a material fact about a particular security or the risks involved

Anyone Can Be A Victim of Stockbroker Fraud

Most investors rely on the advice of brokers as a trusted source of financial protection to secure their future. Investors willingly place themselves in the hands of their financial experts expecting them to act in good faith on behalf of their clients. So it is all the more shocking and bewildering when an investor, who may be a lifelong, conservative saver, is suddenly faced with stockbroker fraud and potential financial ruin.

Can Stockbroker Fraud Losses Be Recovered?

Stockbrokers have legal duties to their investors, and these are well-defined by U.S. Securities law. If you believe you are a victim of stockbroker fraud you should consult a securities fraud lawyer. Unlike regulatory agencies, which are focused on oversight of the entire industry, a stockbroker fraud attorney will concentrate solely on the details of your case and the recovery of your losses.

If you believe you are a victim of stockbroker fraud, call Sokolove Law today at (800) 995-1212 and speak with one of our case managers who specialize in investment fraud, or fill out the form on this page to request a free no-obligation legal consultation.


Sokolove Law Team

Contributing Authors

The Sokolove Law Content Team is made up of writers, editors, and journalists. We work with case managers and attorneys to keep site information up to date and accurate. Our site has a wealth of resources available for victims of wrongdoing and their families.

Last modified: May 10, 2024