What Is Stockbroker Fraud?

It may come as a surprise to learn that not all stock losses are caused by fluctuations in the stock market or because the investment itself was a poor choice. One common way investors lose money is because of their stockbroker’s fraudulent actions.

There are many different ways that brokers, and the financial institutions that employ them, can take advantage of investors for their own financial gain. Read on to learn more about some common types of stockbroker fraud and what you should do if you have suffered considerable losses on the stock market.

Common Types of Stockbroker Fraud

Fraud and misconduct by stockbrokers can take many different forms. Some of the types of fraud that occur more commonly include:

  • Negligence
  • Failure to supervise
  • Lack of portfolio diversification
  • Unsuitability
  • Ponzi schemes
  • Unauthorized trading
  • Misrepresentation
  • Churning (also called excessive trading)
  • Selling away

These are just a couple ways investors can be defrauded by stockbrokers. If you have been wronged in another way, you may still have a case. Your stock stock loss lawyer can help you learn more about your legal options.

What to Do if You’re a Victim of Stockbroker Fraud

If you have been a victim of stockbroker fraud, there are several options you have to seek recovery of your investment losses. The option more commonly chosen by wronged investors is arbitration with the Financial Industry Regulatory Authority (FINRA).

FINRA oversees the conduct of registered stockbrokers and brokerage firms. If FINRA agrees to hear your case, you’ll have the chance to hold your liable stockbroker accountable for their actions and possibly recover the losses you endured.

Contact a Stockbroker Fraud Lawyer

If you are interested in learning more about what legal options are available to you after suffering devastating investment losses, reach out to a dedicated stockbroker fraud lawyer at Wolper Law Firm, P.A.. Call 800.931.8452 or complete the online contact form included below to schedule your complimentary case review.

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]