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