Stockbroker Misconduct


Recovery for Junk Bond and High-Yield Investment Losses

A stockbroker has a duty to recommend appropriate investments based upon an individual’s or company’s specific circumstances and goals. Failure to do so may indicate stockbroker misconduct or negligence and may give rise to a cause of action.

Zamansky LLC prosecutes and recovers damages on behalf of investors who have suffered losses because of broker misconduct. Our securities attorneys have the experience and resources to fully investigate acts of stockbroker fraud and negligence and to hold junk bond issuers accountable to their investors.

Duties to Investors

Stockbrokers, brokerage firms and financial advisors have specific duties to their clients. This holds true whether dealing in investment quality bonds, non-investment quality junk bonds or other securities.

Investors should expect their advisors and brokers to uphold the following six principles:

  1. Fiduciary duty: The financial professional has a duty to act in the investor’s best interests when conducting a transaction.
  2. Duty of loyalty: Brokers and financial advisors should disclose conflicts of interest and recuse themselves if the conflict interferes with the investor’s best interests.
  3. Duty of good faith and fair dealing: The broker should act with honesty and fairness in all dealings related to the investor’s transactions.
  4. Disclosure: The broker must disclose all material information to the investor, including the risks involved in investing in high-yield junk bonds.
  5. Trade authorization: The broker must be authorized to make the trades and carry out the instructions of the investor.
  6. Suitable recommendations: The broker or financial advisor is responsible for making suitable recommendations that consider the investor’s risk threshold and goals.

Damages Caused by Broker Misconduct

Investors who sustain damages arising from broker negligence or fraud may pursue claims of broker misconduct. Our investment loss attorneys handle cases involving:

  • Misrepresentation when a broker glosses over or understates the potential risks involved in investing in a non-investment-quality junk bond, selling only its high return potential
  • Failure to disclose – for example, if the broker is aware of matters that could devalue the securities or cause the junk bond to default
  • Unsuitable investment when a broker recommends a junk bond to a conservative investor with a low risk threshold
  • Guaranteeing returns, but failing to disclose the risks involved in investing in such high-yield markets as energy and commodities
  • Fraud if the broker intentionally misleads investors to invest in junk bonds so the broker or firm can profit at the expense of the investor

Learn More About Recovering Losses Caused by Broker Misconduct

Zamansky LLC assists investors in recovering losses that arise from broker fraud and negligence. Our securities lawyers have the experience and determination to investigate and prosecute broker misconduct claims to make investors whole. Contact us today for a free, confidential consultation. We respond to all inquiries within 24 hours.