Stock Broker Misconduct
What is Stock Broker Misconduct?
Stock broker misconduct is an umbrella term that refers to any fraud or violation of law or regulations by brokers. Broker and brokerage firms are regulated by FINRA, the SEC (Securities and Exchange Commission), as well as federal & state law. Among other things, brokers are required to:
Make suitable recommendations
Make fair and balanced risk disclosures
Manage a client’s investment portfolio
Disclose conflicts of interest
Research financial markets
Monitor clients’ investments
Report information to clients
Types of Stock Broker Misconduct
Excessive Trading
Unsuitable Investments
Churning
Fraud, Misrepresentation, or Omissions
Unauthorized Trading
Over-Concentration
Excessive Use of Margin
Broker Negligence
Failure to Supervise
Violations of The Securities Act of 1933, The Exchange Act of 1934, The Investment Company Act of 1940, The Investment Advisers Act of 1940, Pennsylvania’s Blue Sky Laws, FINRA and SEC Regulations