As investors in the stock market, we are told to be prepared to experience losses from time to time. Brokers cannot predict the future, and with diversification comes the expectation that overall gains will exceed overall losses over the long haul. With these thoughts in mind, it can often be difficult to know when a losing investment crosses the line between a reasonable risk and broker fraud or misconduct.
Common Signs of Broker Fraud and Misconduct
As attorneys who focus on securities fraud litigation, we have decades of experience analyzing cases involving stock market losses. The following are all common indicators that you may be entitled to compensation for the poor performance of your investment portfolio:
- Sudden and significant losses
- Trades appearing on your account that you did not authorize or do not understand
- An excessive number of frequent trades
- Unexplained losses or withdrawals
- Risky investments that make you uncomfortable
Each of these may be a sign that your broker is not managing your portfolio with your best interests in mind. If that is the case, you have the right to recover for the losses you have sustained.
What to Do if You Identify Signs of Stock Broker Fraud or Misconduct
If you think you may be a victim of securities fraud, you should speak with an attorney right away. If you are not sure, the fact you are asking the question is probably indicative that something has gone awry. In either case, the sooner you speak with an attorney, the sooner you can gain some level of comfort with your situation and decide what to do next.
If you suspect fraud or misconduct, it is important to be careful about how you approach the situation with your broker. This is usually best left to your attorney. While some brokers will acknowledge their mistakes and work to right their wrongs, the sad reality is that many stock brokers intentionally take advantage of their clients. This is particularly common with elderly and first-time investors.
If you approach your broker about potential fraud or misconduct, the following are all potential scenarios for what might happen next:
- Your broker will try to convince you they did nothing wrong.
- Your broker will try to get you to make statements that shift responsibility for your losses off of them and onto you.
- Your broker will abscond with your funds in hand.
By speaking with an attorney and allowing him or her to represent you in communications with your broker, you can help protect yourself against these concerns. Depending on the facts at hand and the egregiousness of your broker’s misconduct, your attorney may even recommend proceeding immediately with a lawsuit or filing a Statement of Claim for FINRA arbitration. But, regardless of the situation, an experienced attorney will be able to help you understand your rights and put a stop to your losses.
Know Your Rights | Speak with a Securities Fraud Attorney at Zamansky LLC
Zamansky LLC provides compassionate and experienced representation for victims of stock broker fraud and misconduct. If you have questions about losses in your investment account, contact one of our attorneys today.