What Are A Stockbroker’s Legal Obligations to Me?

Stockbrokers owe four main duties to their investing customers:

  • The duty to recommend only “suitable” investments.
  • The duty to disclose all material facts regarding an investment and to not misrepresent material facts about the investment.
  • The duty to put their investing customer’s interests ahead of their own.
  • The duty to engage in transactions only after receiving authorization from the investing customer.

An investment is “suitable” if it meets the customer’s investment objectives and is consistent with their tolerance for risk, their age, employment status and overall financial condition. An investment can be unsuitable if it (a) is too risky given the customer’s age and financial condition or (b) is too conservative given the customer’s need to earn a reasonable rate of return on his or her investments.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]