Types Of Cases Security Law Attorneys Often Handle For Investors
A securities law attorney takes on cases that involve different financial entities such as stocks, bonds or mutual funds. Often this means representing a client who has been a victim of someone else who has tried to take advantage of them financially. Unfortunately, financial brokers sometimes fail to follow laws concerning stocks, bonds and mutual funds when dealing with investors. This can leave an investor in a very financially detrimental position if the problem is not resolved. These are some of the types of cases that security law attorneys often handle for investors.
Churning
When a broker is accused of churning, this means that he may have made excessive trades in the name of the investor in order to gain a higher commission. If the trades are unsuccessful, the investor suffers a greater loss because the broker exceeded the amount the investor had agreed to invest.
If the trades are successful, the investor is expected to pay the broker a higher commission than he was aware of. Regardless of the outcome, the investor has more of his money invested in stocks, bonds or mutual funds than he originally agreed to with the broker.
Unauthorized Trading
This occurs when a broker invests in trades that the investor did not authorize or specifically did not want to invest in. While the broker may believe this is a good financial decision, the investor has the right to refuse any trading that he does not want to be involved with. If the broker goes against the investors wishes, he is breaking the law.
Misrepresentation
It is the responsibility of the broker to inform the investor of all information concerning an investment before making a trade with the investor's money. If he leaves out certain info or makes a trade sound more appealing than it actually is to get the investor to authorize the trade, this is considered misrepresentation.
Unsuitability
A broker is usually well aware of the investor's trade history and which types of stocks, bonds or mutual funds the investor normally prefers to invest in. However, if he chooses to invest the investor's money in trades that are not suitable to him and this results in a loss, he may have a claim of unsuitable investing brought against him.
In some cases, it may be necessary to file a complaint against both the broker and the brokerage firm he is employed by. When a broker sells the investor's account to another brokerage and keeps the money from the sale for himself, this is considered misappropriation. The investor has the right to bring a court claim against the broker and the brokerage he works for because he was not being properly supervised while handling the account of a client.
If you suspect your broker of any of the above, don't hesitate to hire a securities law attorney or other corporate lawyer to make sure you're not taken advantage of.
