Q: How can I prove my broker failed to diversify my portfolio and how terrible an error would it have to be for me to win a
lawsuit over it?
What you describe is also known as over-concentration. Over-concentration violates the suitability rules that financial professionals are required to follow. Over-concentration is one of the riskiest, and most speculative, investment strategies because the portfolio is not diversified and subject to the risks associated with the industry or type of investment product. Generally, if an investment professional concentrates a customer’s portfolio in an individual investment or type of investment (i.e., more than 10% of the entire portfolio), then the investment is considered to be over-concentrated. An attorney with securities arbitration experience can help you review your monthly statements to determine whether your investments are over-concentrated.
The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.