Financial Advisor Wrongdoing

Will Rogers supposedly said, “It’s easy to make money in the stock market; buy a stock when it’s down, and sell it when it goes up. And if it doesn’t go up, don’t buy it!”

I still get a chuckle from this because we all know that the market fluctuates in value.

The task before making a claim against your financial advisor, stockbroker, or brokerage firm is to determine which losses may have been due to market risk consistent with the customer’s investment objectives and risk tolerance, and which ones were caused by stockbroker negligence or wrongdoing. For example, if you have retired, your primary investment objective should probably be preserving the capital that you have worked a lifetime to accumulate, and deriving an income from these investments. If your financial advisor/broker has recommended that purchase of an investment that did not fit this profile, that recommendation may violate the industry’s “suitability” rule, which states “In recommending to a customer the purchase, sale or exchange of any security, a member shall have reasonable ground for believing that the recommendation is suitable for such a customer.”

A financial advisor/broker must also comply with the “know your customer” rule, which provides that an advisor/broker must use due diligence to learn the essential facts relative to every customer, every order, every cash or margin account acceptable or carried by such organization.

If you find that a financial advisor/broker has abused the trust and confidence within your business relationship, you are entitled to arbitrate or mediate the dispute with your brokerage firm. You may also want to call the FINRA Investor Hotline at (800) 637-3243 to see whether your broker has been subject of other complaints. Or call us toll-free, for more information if you believe that you suffered an investment loss: (860) 677-4334. From its offices in Connecticut and Florida, the Law Offices of Howard M. Rosenfield has been representing investors nationwide in securities arbitrations and mediations for over 30 years. Please call now!