Broker Negligence


Actions Against Brokers and Brokerage Firms

Brokers have a duty to their clients to act with care. Failure to do so may result in a cause of action for negligence. The bar for proving negligence is not as high as fraud or misrepresentation, but collecting damages can be difficult without knowledgeable counsel.

Zamansky LLC concentrates its New York City practice on representing investors in securities-related claims. We regularly handle FINRA arbitration and class action litigation involving losses arising from breach of fiduciary duty, fraud and negligence of major brokerage firms. We recently recovered damages in claims involving Puerto Rico bond funds, energy sector investment losses, commodities investment losses and other high-yield, high-risk bonds.

Elements of a Broker Negligence Claim

The elements of a negligence claim overlap those of a breach of fiduciary duty claim. In fact, our stock broker fraud attorneys often find sufficient evidence to bring both causes of action.

To prevail in a negligence claim, the investor must prove:

  • The broker owed the investor a duty
  • The broker breached that duty by an act or omission
  • The breach caused harm to the investor
  • The investor suffered damages as a result of the breach

Not all bad decisions or mistakes rise to the level of negligence. A broker may recommend a transaction that resulted in losses, but still not have acted negligently. Likewise, a broker may have acted negligently and yet the investor did not suffer provable losses.

Our attorneys have extensive experience in investigating junk bond losses, proving negligence and establishing damages.

Negligent Broker Actions in Junk Bond Transactions

Brokers are required to remain well-informed about the long-term trends and immediate fluctuations in the market, to understand their clients’ financial situation and goals, and to advise investors from a position of knowledge and care. A failure to satisfy these basic duties may rise to negligence.

Common broker actions that may rise to the level of negligence include:

  • Mischaracterizing a high-risk transaction as low-risk
  • Explaining the potential high-yield aspect of an investment, but not its high risk
  • Failing to conduct due diligence before making a junk bond recommendation
  • Recommending an unsuitable high-risk junk bond to a client with a low risk tolerance
  • Recommending junk bonds to an investor with a portfolio that includes an inappropriate percentage of non-investment grade securities
  • Making a false statement of material fact, whether purposefully or unintentionally
  • Basing an investment recommendation upon bad information
  • Failing to act with the skill and knowledge expected of brokers

Contact Our Wall Street Securities Firm for Help Recovering Losses

Zamansky LLC regularly represents investors who have sustained losses because of their brokers’ breach of fiduciary duty, fraud or negligence in conducting junk bond transactions. Our law firm aggressively pursues recovery from brokers and brokerage firms. Your claims evaluation is risk-free and confidential and our lawyers respond to all inquiries within 24 hours.