Stockbrokers & Securities Fraud


Table of Contents

  1. How do I know if I have a case?
  2. Why is my stockbroker or financial planner different from any other salesperson that I deal with on a day to day basis?
  3. What should I do if I think I have a case?
  4. What costs can be anticipated in this type of case?
  5. How long does it take for me to get an award?

How do I know if I have a case?

Most cases fall into one or more of the following four categories. The first category involves the sale of unsuitable securities. An unsuitable sale to a customer typically means that there is a mismatch between the objective of the customer and what is recommended and sold to the customer. A good example is an elderly customer who wants a highly rated bond for a the sake of security and desires a steady stream of income and is sold a "junk" bond or a "penny" stock instead.

A second category involves churning. Churning a customer's account means excessive trading of the account for the sole purpose of generating excessive commissions. There are complicated mathematical formulas for determining churning. Therefore, it is recommended that a customer contact an attorney who specializes in securities law in order to determine if their account has been churned.

A third category involves unauthorized transactions or failure to properly execute an order. This means that a stockbroker or financial planner purchased or sold a security for you without first receiving your permission. When this occurs, it is crucial that you immediately complain in writing about the trade, not only to your broker/planner, but to his/her superior.

A fourth category involves your stockbroker/planner making a misstatement that influences your decision to purchase or sell stock. The misstatement must have had a major or significant influence in your decision to buy or sell the stock.

If you have a question regarding a legal matter in the state of
Michigan contact AAAA Legal Center by Phone or E-Mail

MAIL US
(E-Mail transmissions are not confidential)


Why is my stockbroker /planner different from any other salesperson that I deal with on a day to day basis?

A stockbroker or financial planner is licensed by the state you live in and by the stock exchange which he/she is licensed to trade in. Therefore, he/she must abide by a high code of conduct and ethics otherwise known as his/her fiduciary duty to act in your best interests. When he/she breaches that duty, a claim arises.

If you have a question regarding a legal matter in the state of
Michigan contact AAAA Legal Center by Phone or E-Mail

MAIL US
(E-Mail transmissions are not confidential)


What should I do if I think I have a case?

If it is a case under $10,000.00, then you may want to represent yourself before an arbitration tribunal such as the National Associations of Securities Dealers, Inc. (212) 858-4400. In a case over $10,000.00, it is best to consult an attorney who specializes in representing customers against stockbrokers/financial planners because most likely the opposing side will have highly trained attorney's from large firms or experienced in house attorneys.

If you have a question regarding a legal matter in the state of
Michigan contact AAAA Legal Center by Phone or E-Mail

MAIL US
(E-Mail transmissions are not confidential)


What costs can be anticipated in this type of case?

Most attorneys who specialize in this work take these type of cases on a contingency basis or part hourly/part contingency basis. Filing fees run from a few hundred dollars to $1,500.00, depending on the amount of money lost

If you have a question regarding a legal matter in the state of
Michigan contact AAAA Legal Center by Phone or E-Mail

MAIL US
(E-Mail transmissions are not confidential)


How long does it take for me to get an award?

Assuming there is no settlement, the entire process takes approximately one year.

If you have a question regarding a legal matter in the state of
Michigan contact AAAA Legal Center by Phone or E-Mail

MAIL US
(E-Mail transmissions are not confidential)


Copyright 2001, 2002
Last modified: February 11, 2010