Stockbroker Fraud


The most common stockbroker fraud cases include


  • Conflict of Interest
  • Continuing a Risk
  • Improper Investment Advice
  • Stock Churning
  • Stock Unsuitability
  • Stock Over concentration
  • Stock Misrepresentation
  • Stockbroker Negligence
  • Unauthorized Trading
  • Stockbroker Fraud: Conflict of Interest

If your stockbroker or brokerage firm has outside ties to a business and sells you that stock, they may have acted out of a conflict of interest. Your stockbroker should offer you the best investment for your needs, not the conflicted needs of the stock brokerage firm.

Stockbroker Fraud: Continuing a Risk

If your stockbroker advises you to hold stocks based on speculation or uncertain future events, even though the risks are obvious and the potential gain is unlikely, the financial advisor has put you in a situation of "continuing a risk".

Stockbroker Fraud: Improper Investment Advice

Improper investment advice includes biased investment advice, unfounded advice or contradictory advice. Biased investment advice often occurs as a result of the stockbroker's or brokerage's desire to move a certain stock based on fees they will receive, not the based on the needs of the client. Unfounded advice occurs when a financial adviser gives investment without doing proper research or due diligence. An adviser is said to have given contradictory advice when they give conflicting advice to different clients.

Stockbroker Fraud: Churning

"Stock churning" is considered excessive trading in your account in an attempt to generate excessive commissions at your expense. A stockbroker churns your account simply to make more money. To prove your broker has churned your account, our lawyers look for excessive trading activity. If you feel your broker is buying and selling securities in an effort to fraudulently earn excessive commissions, your may be a victim of stock churning. Contact our stockbroker fraud lawyers to evaluate your case.

Stockbroker Fraud: Unsuitability

Stockbrokers have a duty to understand which investments are suitable for their clients, based on individual clients needs and investment objectives. Brokers also have a duty to understand each customer's risk tolerance and financial ability to incur the risk associated with their investment. In other words, if a stockbroker asks you to invest in a stock that he knows is an unsuitable investment for you, then you might be a victim of unsuitability. Your stockbroker also has a duty to explain all risks associated with a particular investment. If your stockbroker did not explain the risks of an investment to you, he may be committing stockbroker fraud. Basically, it is your stockbroker's duty to understand your investment needs and recommend appropriate investments. If your stockbroker made unsuitable investment recommendations to you, he may be liable for your stock losses.

Stockbroker Fraud: Over-Concentration

One of the "golden rules" of investing in stock is to diversify your portfolio. If a stockbroker fails to diversify your portfolio, he may be potentially liable of over concentration, and therefore liable for your losses in the stock market.

Stockbroker Fraud: Misrepresentations and/or Omissions

A stockbroker is required to disclose material facts regarding each investment. If your broker failed to disclose material facts, and/or misrepresented material facts in order to get you to invest in a particular stock, he may have committed stockbroker fraud, and may be liable for your losses.


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