Protecting Your Legal Rights
by Fred J. Fleming (800) 882-5500 or 213-381-1321
If you have lost money in the stock
market, you may have legal recourse against your stockbroker
or financial advisor. Stockbrokers must comply with a
set of legal standards. If they breach these standards
and cause economic loss, you may have a claim.
The following are examples of types
of conducts by brokers that are prohibited by Federal and
State Law.
Unsuitable
Investments:
Investments must be judged in terms of
your needs and resources. If you have indicated to
your broker that you want to be conservative and he/she
urges you to buy a risky stock, that investment is
unsuitable.
Churning:
Churning is the excessive trading in
securities more often than necessary in order to increase
the commissions.
Unauthorized Trades:
Your broker bought any securities and (or) stock
without asking you.
Order Failure:
Your broker did not sell (or buy) securities and
(or) stock when you told him to.
Mutual Fund Switching:
Your broker sells one of your government bond
mutual funds and buys another government bond mutual fund.
As an example, if a retired
school teacher expresses to stockbroker that he or she wants
to be in only safe investments and the stockbroker buys
speculative stock investments and a major loss occurs, the
stockbroker is in violation of the law.
