Are Stockbroker Mistakes Considered Fraud?
Everyone knows that mistakes happen, but when you have a considerable amount of money on the line, a little mistake can result in substantial losses. Fortunately, the Financial Industry Regulatory Authority (FINRA) provides opportunities for people who have wrongly suffered investment losses to recover them in arbitration.
But your complaint can only be successful if you are able to prove that your financial advisor or brokerage firm is responsible. You probably know that cases of fraud can be seen in arbitration, but what about mistakes made by your stockbroker?
Are you entitled to restitution then? Continue reading to learn more about some examples of stockbroker mistakes and fraud and how you can go about getting your money back for broker misconduct.
Fraud and Stockbroker Conduct
In some lines of work, it’s okay to make mistakes. As long as no one’s livelihood is on the line, most mistakes can be forgiven and easily resolved. But losing massive amounts of money due to your stockbroker’s mistake is simply unacceptable.
You can always initiate a FINRA arbitration complaint seeking full repayment, but to be successful, you’ll have to prove that your broker’s conduct was the cause of your losses. It doesn’t matter whether your broker’s mistake was intentional (fraudulent) or accidental (a mistake).
What matters is that your stockbroker advised you to invest, and as a result of that recommendation, you lost money. Stockbroker fraud and mistakes are not the same, but both are ultimately the fault of the broker and may be treated the same. Some examples of stockbroker fraud could include:
- Selling away
- Insider trading
- Unauthorized trading
- Excessive trading
But some examples of stockbroker and brokerage firm mistakes could include:
- Failure to supervise
- Lack of portfolio diversification
- Unsuitable recommendations
All of these examples could be considered types of broker fraud, as well. The only real difference is intent, and the broker’s intentions are irrelevant when it comes to your money. You deserve to be repaid when your financial advisor’s conduct is the cause of your investment losses.
FINRA Arbitration for Stockbroker Misconduct
The good news is that you can do something to hold your financial advisor or institution accountable for their negligence. FINRA arbitration is often a preferred option for recovering full restitution. This is because arbitration can typically be resolved much more quickly than if you were to bring your case to court.
Furthermore, if the arbitrators come down in your favor, the liable party will be ordered to compensate you within thirty days of the decision. If you had gone to court, you could be held back by several appeals and have to wait years before ever seeing any money, if at all.
Get in Touch with a Stockbroker Misconduct Lawyer
If you are interested in learning more about your legal options against broker mistakes but are unsure of where to turn, contact a stockbroker misconduct lawyer at Wolper Law Firm. You can give our office a call at 800-931-8452 or complete the online contact form below when you are ready to schedule your free, no-obligation consultation.
- Former LPL Financial And Current Royal Alliance Broker, Kevin Barletta, Supsended by FINRA For Two Months And Fined $5,000 For Alleged Improper Trading Practices With REITs
- Former Ameriprise Financial Services, Inc. Broker, Sean Refsnider, Barred By FINRA For Allegedly Converting Assets From An Elderly Client
- Barred Former Financial Services, Inc. Broker, Johnathan Freeze, Has Nine Costumer Complaint Disclosures
- Merrill Lynch, Pierce, Fenner & Smith Broker, Forrest Jones, Under Investigation By The United States Securities And Exchange Commission
- Former Fortune Financial Services Broker, Jeffrey Butler, Has Had Five Customer Complaint Disclosures
- W & S Brokerage Services, Inc. Broker, Marcus Beasley, Sanctioned And Discharged For Allegedly Engaging In Outside Business Activity
- Former AXA Advisors LLC Broker, Jenna Kang, Barred By FINRA For Failing To Cooperate With Investigation Regarding Whether She Improperly Signed Customer Forms
- Former Vision Brokerage Services, LLC Broker, Dwight Dykstra, Supsended by FINRA For One Year And Fined $10,000, For Allegedly Engaging In Private Securities Transactions
- Four Points Capital Partners LLC Broker, Michael Christopher Martino, Has Had Five Customer Complaint Disclosures
- Former Woodbury Financial Services, Inc. Broker, Ronald Hannes, Barred By FINRA For Failing To Cooperate With FINRA Investigation Regarding The Conversion Of Client Assets