Securities Fraud

What is Securities Fraud?

Securities misconduct or fraud occurs when clients are encouraged to invest in high-risk schemes, purchase volatile stock, or participate in financial arrangements that devalue their savings or cause significant financial loss. Under certain conditions, clients may be entitled to compensation for damages they suffer as the result of a broker's failure to honor their wishes and invest their money appropriately.

How can You Determine Loss as a Result of Fraud Versus General Market Performance?

You or someone close to you may be entrusting a stockbroker to make smart decisions with your money, but that doesn't mean you should be kept in the dark about the nature of your investments. Many find out about fraud while reviewing financial statements and 1099 forms with their accountant, but it is important to remain aware of the performance of your investments so that you are more apt to detect the reason for any losses.

What are Some Examples of Securities Fraud?

Listed below are some technical definitions of actions that may constitute Securities Fraud. Because many people are unfamiliar with these terms, it is important to speak with a case manager in order to better understand if you have been affected by any of these fraudulent acts.

Making Unsuitable Recommendations

Advising an investor to purchase, sell or exchange and security that is not suitable given the client's financial situation and needs

  • Over Concentration:
    Recommending or failing to diversify a portfolio that is over-concentrated in a small number of stocks or one asset class
  • Misrepresentation and Omission:
    Knowingly offering inaccurate, incomplete, or biased information or omitting a material fact about a particular security or the risks involved, in an effort to control the market or draw business
  • Failure to Execute:
    Failing to execute a client's order in a timely manner, refusing to sell a security, or attempting to dissuade a client from selling a particular security
  • Selling Away:
    Recommending to a client an alternative investment that is offered by a person or entity other than the brokerage firm and has not been reviewed, approved or recommended by the firm
  • Churning:
    Engaging in excessive trading in an account in an effort to generate excessive commissions

If you can answer yes to any of the following questions, you may have been a victim of securities fraud:

  • Have you been the victim of bad investment advice?
  • Did your stockbroker recommend risky investments without explaining the risks?
  • Did your stockbroker make trades without your understanding or authorization?
  • Did your stockbroker excessively trade your account?

If you or a loved one is in need of legal assistance, call Hollis Wright at 844-529-8255 or submit an online questionnaire. The initial consultation is free of charge, and if we agree to handle your case, we will work on a contingency fee basis, which means we get paid for our services only if there is a monetary recovery of funds. In many cases, a lawsuit must be filed before an applicable expiration date, known as a statute of limitations. Please call right away to ensure that you do not waive your right to possible compensation.

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