The stock market and financial industries are notoriously complicated. Investors cannot always be expected to have a full understanding of what happens within the securities industry without the guidance of a highly qualified stockbroker or financial advisor.
Because investors are trusting their brokers with incredibly sensitive information—in some cases giving them access to their financial information—it is imperative that the stockbroker be held to a high standard.
In the financial world, this is known as fiduciary duty. Below, we go into further detail about what fiduciary duties are and what you can do if your stockbroker is in breach of this responsibility.
Stockbroker Fiduciary Duty, Explained
To put it simply, a fiduciary duty means that your stockbroker or financial advisor has an obligation to always act in your best interests. There are many different ways this duty can be broken.
Negligence, misconduct, failure to provide you with material information, and conflicts of interests are just a few examples of a breach of fiduciary duty. The good news is that when your broker fails you in this way, you can hold them accountable.
Only registered stockbrokers have a fiduciary duty. For this reason, it is very important that you work only with financial advisors who are registered.
What to Do If Your Broker Breached Their Fiduciary Duty
The Financial Industry Regulatory Authority (FINRA) oversees stockbroker, brokerage firm, and financial advisor conduct. When a breach of fiduciary duty occurs, and an investor loses money as a result of such a breach, FINRA may grant you the opportunity to recover these losses in arbitration.
Your hearing will be heard by a panel of one or three arbitrators depending on the amount of your losses. If they determine that a breach of fiduciary duty did occur, then they have the power to compel the broker to compensate you accordingly.
Get in Touch with a Stockbroker Misconduct Lawyer
If your stockbroker breached their fiduciary duty and you suffered significant losses due to this negligence, you can do something about it. Contact a qualified stockbroker misconduct lawyer at Wolper Law Firm, P.A. to discuss the details of your case.
Schedule a confidential consultation by calling 800.931.8452 or submitting the quick contact form at the bottom of this page.
Attorney Matthew Wolper
Matt 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.
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