Brokerage firm fraud is a type of investment fraud that occurs when a brokerage firm and/or employees engages in dishonest or illegal activities that harm their clients. Brokerage firms must comply with state and federal laws, as well as regulatory rules. If a firm violates the law or regulations, they may be liable for any financial damages as a result of the violation.
Brokerage firm fraud can include:
Making false or misleading statements about investments.
Omitting material information about investments.
Trading on inside information.
Churning, which is excessive trading in a client's account that generates commissions for the brokerage firm but does not benefit the client.
Unauthorized trading, which is trading in a client's account without the client's knowledge or consent.
Misappropriation of client funds, which is using client funds for the brokerage firm's own purposes.
Brokerage firm fraud can have a devastating impact on investors, who can lose their life savings or retirement funds. If you believe that you have been the victim of brokerage firm fraud, it is important to contact an experienced securities attorney to discuss your legal options.
Some of the red flags that may indicate that you are a victim of brokerage firm fraud include:
Your broker is making unrealistic promises about how much money you can make.
Your broker is pressuring you to invest in a particular security that you are not comfortable with.
Your broker is not returning your calls or emails.
You are receiving unexpected statements from your brokerage firm.
You have unexplained losses in your account.
If you see any of these red flags, it is important to take action immediately. You should contact your broker to ask for an explanation, and you should also contact a securities attorney to discuss your legal options.
The Securities and Exchange Commission (SEC) is the federal agency that regulates the securities industry. The SEC has a number of resources available to help investors protect themselves from fraud, including:
If you have been the victim of brokerage firm fraud, you can file a complaint with the SEC and file a private lawsuit to recover damages from the fraud. .
If you are considering filing a lawsuit, contact us to discuss your case. Our Firm can help you understand your legal rights and options, and can file a lawsuit, f necessary.