Stockbroker Fraud Questions & Answers by State
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Stockbroker Fraud Questions & Answers
Q: I believe my broker is defrauding me and I suspect that other clients are being similarly defrauded. How do I contact
Mitchell Feldman's answer
You obtain the assistance of a lawyer to review the claims and he or she will assist in this regard if there is a claim to be brought. I would not worry about a class let’s start with what happened to you and whether there is a chance for recovery or a claim against the broker at issue. If there’s a class action generally you cannot profit from the Harm or injuries to others so although you would potential he be awarded A service award Consult a lawyer and get legal advice on whether there...
You obtain the assistance of a lawyer to review the claims and he or she will assist in this regard if there is a claim to be brought. I would not worry about a class let’s start with what happened to you and whether there is a chance for recovery or a claim against the broker at issue. If there’s a class action generally you cannot profit from the Harm or injuries to others so although you would potential he be awarded A service award Consult a lawyer and get legal advice on whether there...
Q: I recently learned my stockbroker has been sued in the past and he never disclosed this. When I confronted him, he told
Alex Schmidt's answer
Whether a financial advisor registered with FINRA must report to his broker dealer or disclose on his brokercheck when they have” been sued” depends on 2 things:
1. The total settlement amount and whether the registered person was involved in an alleged sales practice violation
2. What the nature of your stockbrokers lawsuit consisted of?
Much will depend on what the broker was being sued for. Whether named in the caption of the lawsuit or not, the registered person...
Whether a financial advisor registered with FINRA must report to his broker dealer or disclose on his brokercheck when they have” been sued” depends on 2 things:
1. The total settlement amount and whether the registered person was involved in an alleged sales practice violation
2. What the nature of your stockbrokers lawsuit consisted of?
Much will depend on what the broker was being sued for. Whether named in the caption of the lawsuit or not, the registered person...
Q: What does 'churning' mean in the context of investment fraud?
Alex Schmidt's answer
Churning in connection with investment fraud is simply when a customers investment advisor generates a high amount of trading activity in the customers investment account in order to collect more commissions. Churning is most commonly measured by checking the turnover ratio of the investment account. This formula measures the amount of trades in the investment account in a given time period relative to the total amount of assets being managed by the investment advisor. Churning is a violation...
Churning in connection with investment fraud is simply when a customers investment advisor generates a high amount of trading activity in the customers investment account in order to collect more commissions. Churning is most commonly measured by checking the turnover ratio of the investment account. This formula measures the amount of trades in the investment account in a given time period relative to the total amount of assets being managed by the investment advisor. Churning is a violation...
Q: My stockbroker was part of a Ponzi scheme and he subsequently filed for bankruptcy. Can I still recover money I lost
Alex Schmidt's answer
Even if your stockbroker has filed for bankruptcy you may still be able to recover investment assets lost in connection with the Ponzi scheme. If your stockbroker was licensed with a registered broker dealer then a FINRA arbitration could be commenced against the broker dealer and recovery of your lost investment assets could be made through that entity. If your stockbroker was operating as an independent advisor then recovery can be a little more of an issue. Much will depend on affiliations...
Even if your stockbroker has filed for bankruptcy you may still be able to recover investment assets lost in connection with the Ponzi scheme. If your stockbroker was licensed with a registered broker dealer then a FINRA arbitration could be commenced against the broker dealer and recovery of your lost investment assets could be made through that entity. If your stockbroker was operating as an independent advisor then recovery can be a little more of an issue. Much will depend on affiliations...
Q: What agency would I complain to about the way my stockbroker is handling my account? I'm not sure if it's legal.
Alex Schmidt's answer
If you feel your investment account is being mismanaged you can report this to Financial Industry Regulatory Authority or ("FINRA"). This self-regulatory organization or ("SRO") oversees brokerdealers and sets compliance rules by which they must act. FINRA is where customer complaints against broker dealers for any type of misconduct are filed and FINRA rules and procedures set the terms by which they are adjudicated. The manner in which your complaint will be handled will really depend on the...
If you feel your investment account is being mismanaged you can report this to Financial Industry Regulatory Authority or ("FINRA"). This self-regulatory organization or ("SRO") oversees brokerdealers and sets compliance rules by which they must act. FINRA is where customer complaints against broker dealers for any type of misconduct are filed and FINRA rules and procedures set the terms by which they are adjudicated. The manner in which your complaint will be handled will really depend on the...
Q: I'm trying to figure out if my "financial planner"
Alex Schmidt's answer
If your "financial planner" is a stockbroker who sells and markets stocks, bonds or other securities products, the easiest way to assess their certifications is checking the FINRA platform Brokercheck. Simply type in the brokers name and you will see what certifications the broker or "financial planner" has under the "Examinations" section of the platform. This will tell you if the financial planner has a Series 7 license which permits someone to sell or market securities products. Brokercheck...
If your "financial planner" is a stockbroker who sells and markets stocks, bonds or other securities products, the easiest way to assess their certifications is checking the FINRA platform Brokercheck. Simply type in the brokers name and you will see what certifications the broker or "financial planner" has under the "Examinations" section of the platform. This will tell you if the financial planner has a Series 7 license which permits someone to sell or market securities products. Brokercheck...
Q: I asked for documentation/filings from the
Alex Schmidt's answer
If you have the name of the company you can simply go onto the SEC platform known as EDGAR and enter the name of the company or its ticker. This SEC platform will contain a trove of data on the company at issue. As for the broker there is no regulation that I am aware of that mandates a stock broker to hand over filings covering a company. If you purchased a new publicly traded security then the broker is obligated to provide a prospectus covering the security. Of course, as a matter of good...
If you have the name of the company you can simply go onto the SEC platform known as EDGAR and enter the name of the company or its ticker. This SEC platform will contain a trove of data on the company at issue. As for the broker there is no regulation that I am aware of that mandates a stock broker to hand over filings covering a company. If you purchased a new publicly traded security then the broker is obligated to provide a prospectus covering the security. Of course, as a matter of good...
Q: Do I have a claim for if there was also a general downturn in the market when I lost money?
Alex Schmidt's answer
You absolutely may still have a stockbroker fraud claim if their was a market downturn. Much will depend on the violation that you are alleging occurred whether it be fraud, misrepresentation, unsuitability or any number of potential violations. Your investment losses and whether you have sustained any are of course essential. Your financial profile and investment objectives which were stated to your financial advisor must also be considered. After the mass market loss following the Great...
You absolutely may still have a stockbroker fraud claim if their was a market downturn. Much will depend on the violation that you are alleging occurred whether it be fraud, misrepresentation, unsuitability or any number of potential violations. Your investment losses and whether you have sustained any are of course essential. Your financial profile and investment objectives which were stated to your financial advisor must also be considered. After the mass market loss following the Great...
Q: I've heard the rules are changing in protecting
Alex Schmidt's answer
There are rules in place protecting you against bad or unsuitable investments. FINRA suitability rules for instance require that any investment recommendation made by a broker to an investor must be in line with investors stated financial profile and objectives. What I think you might be referencing in terms of a rule change or what a broker has to tell you is the Department of Labor (DOL) Fiduciary Rule which was recently overturned by a Federal Court and is no longer being pushed by the Trump...
There are rules in place protecting you against bad or unsuitable investments. FINRA suitability rules for instance require that any investment recommendation made by a broker to an investor must be in line with investors stated financial profile and objectives. What I think you might be referencing in terms of a rule change or what a broker has to tell you is the Department of Labor (DOL) Fiduciary Rule which was recently overturned by a Federal Court and is no longer being pushed by the Trump...
Q: If the stockbroker didn't force you to buy the stock, but did talk it up
Alex Schmidt's answer
As a former Series 7 and 66 stockbroker I can attest to having personally "talked up" many different securities. Whether there is a cause of action depends on what you mean by "talked up". If the stock broker mispresented the issue or provided false information concerning the stock there would be grounds for a fraud claim against the broker. There may also be grounds for a claim if the stock broker related the stock back to your financial profile. For instance, if the stock broker claimed the...
As a former Series 7 and 66 stockbroker I can attest to having personally "talked up" many different securities. Whether there is a cause of action depends on what you mean by "talked up". If the stock broker mispresented the issue or provided false information concerning the stock there would be grounds for a fraud claim against the broker. There may also be grounds for a claim if the stock broker related the stock back to your financial profile. For instance, if the stock broker claimed the...
Q: How often are brokers supposed to contact clients? Is it mandated in any way?
Alex Schmidt's answer
Whether a client needs to be contacted really depends on the context concerning the question. If the investment account is a non-discretionary account then the broker has to contact the client prior to each trade being entered. If the account is a managed account where the broker has received discretionary trading authority from the client there is no requirement to contact the client prior to entering trades or changing a client’s overall asset allocation. This does not mean a broker in a...
Whether a client needs to be contacted really depends on the context concerning the question. If the investment account is a non-discretionary account then the broker has to contact the client prior to each trade being entered. If the account is a managed account where the broker has received discretionary trading authority from the client there is no requirement to contact the client prior to entering trades or changing a client’s overall asset allocation. This does not mean a broker in a...
Q: Are brokers required to tell me any information or notify me before buying stocks?
Tracy Stoneman's answer
Not only must a stockbroker talk to a client immediately before each trade, the broker must go over pertinent information, such as the price, number of shares, pros and cons, etc. It is to be a detailed conversation. The only exception is if you gave your broker discretion to make trades without talking to you, but most folks don't do that. I hope that helps you.
Not only must a stockbroker talk to a client immediately before each trade, the broker must go over pertinent information, such as the price, number of shares, pros and cons, etc. It is to be a detailed conversation. The only exception is if you gave your broker discretion to make trades without talking to you, but most folks don't do that. I hope that helps you.
Q: I need advice about deposits to hold apartments during application process and the proper documentation procedures.
1 Answer
| Asked
in
Real Estate Law, Stockbroker Fraud and Landlord - Tenant
for
New York
on
Answered on Jun 9, 2018
Answered on Jun 9, 2018
Elaine Shay's answer
The law varies between states but generally the terms of the contract (deposit agreement) control the rights of the parties. You state that the deposit agreement does not contain language stating the deposit would be nonrefundable but you haven't said it states the deposit would be returnable. If either party could back out of the agreement without any consequence, what was the deposit intended to secure?
In NYC if you were unable to resolve this type of dispute, you could commence a...
The law varies between states but generally the terms of the contract (deposit agreement) control the rights of the parties. You state that the deposit agreement does not contain language stating the deposit would be nonrefundable but you haven't said it states the deposit would be returnable. If either party could back out of the agreement without any consequence, what was the deposit intended to secure?
In NYC if you were unable to resolve this type of dispute, you could commence a...
Q: Is it realtor fraud when realtor overprices a home in favor of the seller due to relationship with seller?
Erik Steven Fisk's answer
Your question is ridiculous. You don't claim "fraud" to argue a house is priced too high. If the price is too high, don't buy it.
Your question is ridiculous. You don't claim "fraud" to argue a house is priced too high. If the price is too high, don't buy it.
Q: can a felon have his conviction removed from his records without having the crime dismissed?
Steve Miyares' answer
Not in Virginia. If you were convicted of the offense in Virginia, then the conviction is permanent and can not be removered or expunged from your criminal record.
Not in Virginia. If you were convicted of the offense in Virginia, then the conviction is permanent and can not be removered or expunged from your criminal record.
Q: My broker gave me information about my holdings that turned out to be false. If I hadn't relied on his word, I would
Tracy Stoneman's answer
You bet you can. That's called fraud and negligence and allows you to recover your losses. However, the strength of your case will depend on the answers to many other questions.
You bet you can. That's called fraud and negligence and allows you to recover your losses. However, the strength of your case will depend on the answers to many other questions.
Q: Is my broker legally required to explain the trades they've made for me if my transactions statements don't make sense
Tracy Stoneman's answer
Absolutely. By the way, unless the account is a written discretionary account, meaning you gave the broker the ability to buy and sell without talking with you, the broker is required to explain the trades to you BEFORE each and every trade!
Absolutely. By the way, unless the account is a written discretionary account, meaning you gave the broker the ability to buy and sell without talking with you, the broker is required to explain the trades to you BEFORE each and every trade!
Q: I was grossly misrepresented by my listing agent. I feel I am being taken advantage of. How can I canx
Ronald J. Eisenberg's answer
If you feel that your broker committed a breach of duty you are free to hire an attorney and file suit. Contact a couple of attorneys, but unfortunately you might find it cost prohibitive. Some causes of action, such as Missouri's Merchandising Practices Act, however, allow a prevailing plaintiff to recover reasonable attorneys' fees. You need to make sure your contract does not have an arbitration provision.
If you feel that your broker committed a breach of duty you are free to hire an attorney and file suit. Contact a couple of attorneys, but unfortunately you might find it cost prohibitive. Some causes of action, such as Missouri's Merchandising Practices Act, however, allow a prevailing plaintiff to recover reasonable attorneys' fees. You need to make sure your contract does not have an arbitration provision.
Q: I don't think my broker has been giving me all of the pertinent details about my accounts and their trade decisions but
Tracy Stoneman's answer
First, write a letter (or email) to the firm asking for everything you need. Give the firm a deadline to respond. A court won't help you unless you first document your efforts and the firm's refusal first.
First, write a letter (or email) to the firm asking for everything you need. Give the firm a deadline to respond. A court won't help you unless you first document your efforts and the firm's refusal first.
Q: Can I be sued for taking someone’s money and saying that I would invest for them when I don’t actually invest for them.
Tracy Stoneman's answer
Yes, because that conduct could constitute fraud and possibly breach of contract depending on the consideration paid.
Yes, because that conduct could constitute fraud and possibly breach of contract depending on the consideration paid.
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