Stock And Investor Fraud - FAQ’s
"What Is Stock Fraud?
Stock fraud occurs when a broker or other investment professional violates the trust placed in him and, as a result, violates the rules of the securities industry.
How do I win a Stockbroker case?
You have to prove that you suffered a large loss due to the stockbroker, investment advisor or financial planner misconduct. You must also prove that you did nothing wrong.
What are typical cases of Stock Fraud?
- Misrepresentation/Omission Of Important Facts
This can involve providing misinformation or omitting important or pertinent facts regarding your financial decisions. For example, a broker might claim he knows the future price of a stock, or his firm somehow controls the stock’s price, or that he has inside information concerning a company’s stock, etc. - Excessive, Unnecessary Trading
Commonly called churning. It happens when a broker, who has explicit authority or practical control over an investor’s account, engages in excessive trading to generate larger commissions. - Trading Without Authorization
When a broker does not consult with the client beforehand and makes trades in a non-discretionary account or the broker does not follow the client specific instructions regarding a discretionary account. - Failure To Follow Investor’s Instructions
;Failure to follow investor’s instructions which result in large losses. - Misappropriation Of The Client’s Account Funds
Misuse of an investor’s funds is often accompanied by the broker’s failure to report the transaction to his employer. Regardless of the firm’s knowledge of its employees’ activities, the company is responsible for the misappropriation of the investor’s money. - Unsuitable Investments
This occurs when a broker or financial planner recommends inappropriate investments – in light of the client’s economic circumstances or financial objectives. For example: an unsuitable investment occurs when a financial planner recommends that his client (a retiree needing regular income) should put her money into high-risk stocks or mutual funds, depriving her of the regular income she needs to survive.
How are securities cases resolved?
Arbitration. 95% of all brokerage agreements contain an arbitration clause, requiring the investor and brokerage firm to resolve any disputes regarding losses through arbitration.
What is Arbitration?
A Securities Arbitration hearing will occur about twelve months after the claim has been filed. At the hearing, the parties or claimants will put forth their case as in court, call witnesses, testify, offering exhibits, etc. The parties have the right to cross-examine each other's witnesses. It is less formal than a trial.
The Law Office of Nadrich & Cohen, a national law firm, is actively reviewing securities and investment loss claims nationwide. If you or a loved one lost a significant amount because of stockbroker or investment broker’s wrongdoing or fraud please immediately contact our specialist representatives. Call our Investment Securities loss hotline at 800-722-0765 or complete the email questionnaire at the right and press submit. A qualified representative will respond as soon as possible if we can be of assistance. Since we are contingency lawyers there is never a charge for our services unless we first obtain a recovery for you.

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