Can I Sue for Failure to Diversify Investments?

Investing can be a lucrative but risky business. But, the risks you take should never stem from irresponsible investments on the part of your trusted stockbroker.

Fortunately, the Financial Industry Regulatory Authority (FINRA) provides opportunities for investors to hold negligent stockbrokers accountable for their actions when certain types of fraud occur, including failure to diversify.

Continue reading to learn more about what it means for investments to have a lack of diversification and what you can do to recover the losses you endured due to your broker’s negligence.

What Does Failure to Diversify Mean?

Have you ever heard the phrase, “Don’t put all your eggs in one basket?” This describes a lack of diversification. Basically, if all of your funds are put into one investment, and that investment fails to generate returns, you will have lost out on your investment in its entirety. For this reason, failure to diversify is considered a violation of securities laws.

FINRA Arbitration for Lack of Diversification

Because failure to diversify is a form of broker misconduct or negligence, you can file a FINRA arbitration complaint against them. This will give you the opportunity to obtain full financial recovery of the losses you endured due to a lack of diversification.

You will need to prove to the arbitrator or arbitrators hearing your case that a lack of diversification occurred, but this should be fairly simple if your accounts show that your investments were not handled appropriately.

Meet with a Respected Stock Loss Lawyer

If you have suffered considerable stock losses and suspect that your stockbroker’s failure to diversify your accounts was the cause, you may be entitled to financial recovery. Contact a reputable stock loss lawyer at Wolper Law Firm, P.A. to further discuss your legal options.

You can schedule a confidential case review by giving our office a call at 800.931.8452 or by completing the secured contact form we have included at the bottom of this page.

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]