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Securities Litigation and Arbitration

Lawyers for Aggrieved Investors

Wolper Law Firm stands ready to assist you with any form of dispute with a financial advisor, brokerage firm or other fiduciary. Here are some of the many types of securities litigation with which we have extensive experience.

Fraud or Misrepresentation

Securities Fraud

Securities fraud encompasses a wide range of misconduct. They generally involve the withholding or misrepresentation of facts necessary to make an informed decision about whether to invest in a security. For example, your financial advisor is legally required to fully explain the risks of any investment, properly disclose the fees and commissions associated with it, and always put your interests ahead of their own. On this the law is very clear. If you believe you may be the victim of securities fraud, read on to learn how to spot the warning signs.

Breach of Fiduciary Duty

A fiduciary is someone who acts on behalf of another to manage assets and finances, such as a financial advisor or broker. Fiduciary duty requires that fiduciaries always act in the best interests of their clients. Specifically, the law holds financial advisors to specific standards of disclosure, due diligence, and consideration of their clients’ needs. While any portfolio can suffer losses, a sudden and steep loss can indicate a breach of fiduciary duty.

Due Diligence

Due diligence is required to ensure investors are being fully informed about a potential purchase. This involves a detailed check of the status, financial and operational, of a potential investment.

Fiduciary Duty

Brokers have an obligation to act in your best interest.

Unsuitable Investments

Financial advisors have a duty to recommend only suitable investments. The standard for suitability requires the recommended securities be properly vetted, not excessive in amount and appropriate to the individual investor. Before making recommendations to you as an investor, a financial advisor must have a complete picture of your investment profile — that is, your needs, goals and risk tolerance. They must provide guidance they believe to be appropriate and also disclose all risks so that you can make a fully informed decision. Suitability claims are common in investment recovery cases, but require experience and care to properly handle.

Unauthorized Trading

All trades that your financial advisor makes on your behalf must be authorized by you. Even in cases where you may have given your advisor leeway and discretion, they must make certain you are aware of and authorize all trades. Generous commissions on investments may tempt advisors to take advantage of clients for their own benefit. Clients who take a passive approach may become the victim of unauthorized trading. Commissions and losses imposed as a result can be recovered.

Lack of Diversification

Diversification is the cornerstone of safe investing. When investing your life savings, you need the security that comes from diversification across asset classes, market sectors and geopolitical arenas. Your trusted advisors are required to take this into consideration when discussing and handling your investments. Failure to diversify can be the result of an inexperienced, overconfident broker or advisor trying to beat the market or make a big win for their client. They might also simply fail to apply proper oversight and due diligence. A lack of diversification can mean steep losses or it can mean missing out on valuable gains. It can spell the difference between security and uncertainty.

Churning

Churning refers to a financial advisor trading securities for the purpose of generating fees or commissions — in other words, putting their own interests ahead of yours. One common example is selling one security and soon purchasing another, similar security. Your market exposure remains unchanged, but you incur trading fees, and perhaps the advisor earns commissions. Churning can be subtle; we are experts at the detailed analysis required to build a strong case.

Failure to Supervise

The responsible stewardship of your savings is the responsibility not only of your financial advisor, but also of their employing broker. Brokerage firms are required to maintain a reasonable system of supervising all employees to ensure adherence to laws and standards. Inappropriate and illegal behavior on the part of advisors indicates a failure of this supervisory system and may form the basis for a cause of action.

Selling Away

Financial advisors are permitted to sell to their clients only securities that are approved by their brokerage firm. Sales of anything else are strictly prohibited. This is for the safety of the investor; only those securities which have undergone a thorough vetting process by a brokerage are appropriate for financial advisors to sell. The other reason for the rule is to prevent conflicts of interest. An advisor might be tempted to persuade clients to invest in businesses in which the advisor holds an interest. Even if the advisor receives no compensation for doing so, this would still constitute illegal selling away.

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]

Elder Financial Abuse

The elderly are all too frequently the victims of financial abuse. They tend to hand off the day-to-day management of their finances to a child or other relative. As cognitive ability often declines in advanced years, they may not fully understand what is being done with their money, but they rightfully trust in those who have a responsibility to handle investments appropriately. Unfortunately, the majority of elder financial abuse is committed by relatives of the victims. Perpetrators rely on the trust afforded them as family members or close friends to steal or misuse funds. They may also make promises, whether false or unrealistic, of repaying the money. If you suspect elder financial abuse of a loved one, contact an attorney. The earlier the activity is uncovered, the more assets can be recovered or kept safe. Read on to learn the warning signs of financial abuse.

  • Ponzi Schemes. Investors place a great deal of trust in financial advisors, granting them access and agency over their life savings. In most cases that trust is well founded. Unfortunately, some advisors use the confidence placed in them to engage in criminal activity for their own financial gain. Most commonly, broker theft occurs when a fiduciary takes a client’s money for their own use. They may also issue false promises to repay the money. It is illegal for a financial advisor or broker to borrow money from a client, even with the intention of repaying it.
  • Broker Theft. Investors place a great deal of trust in financial advisors, granting them access and agency over their life savings. In most cases that trust is well founded. Unfortunately, some advisors use the confidence placed in them to engage in criminal activity for their own financial gain. Most commonly, broker theft occurs when a fiduciary takes a client’s money for their own use. They may also issue false promises to repay the money. It is illegal for a financial advisor or broker to borrow money from a client, even with the intention of repaying it.

Margin and Other Securities Based Lending

Margin is a loan from your brokerage firm, secured by the value of your investments. Making investments on margin can enhance profits when those investments are winners. But it can also magnify risk in the event the investment fails. Margin trading is a speculative investment strategy involving many types of risk that are not appropriate for most investors. If you experienced investment losses on margin trading the Wolper Law Firm can help you.