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Securities Fraud

Texas Broker Fraud Lawyers – (210) 298-6666 - (800) 519-2800

Investment Broker Negligence, Misrepresentation or Excessive Trading

A broker has a fiduciary duty (which is a high level of responsibility) to fairly disclose all of the risks associated with an investment. If your investment broker misrepresents or does not disclose material facts about an investment, and you lose money as a result, you may be eligible to recover your investment losses, plus attorneys fees. The amount of your recovery is based on the level of negligence or mishandling of the investment by the broker or firm.

There are many types of broker fraud and securities fraud in Texas. Here are some of the most common:

Unsuitable Investments

Your broker has a duty to do a risk profile for any client who wants to invest. This profile describes the client's risk potential — in other words, how much the client can afford to lose. An elderly person who needs his or her retirement savings for living expenses does not have the same risk profile of a younger, wealthy, sophisticated investor.

A broker has a duty to know his client and recommend only those investments and trading strategies that are suitable for the client. In making an investment recommendation, a broker must make recommendations that are consistent with the client's risk tolerance, needs and investment objectives. If the investment was not in line with your financial needs, or if you did not understand the risks, you may be eligible for a recovery.

Excessive Trading

If your broker shows a pattern of excessive trading activity in your account, your broker may be engaging in a practice called "churning." A broker engages in the churning solely in an attempt to generate commissions. Often a broker will sell stocks that have increased in value to show a small profit, and keep those that have lost money. If a broker is buying and selling securities in your account excessively, there is a possibility that your account is being churned and you may be eligible for a recovery.

Lack of Diversification

One of the most important rules of investing is diversification. If your broker concentrates your portfolio in any one investment or type of investment, then your risk of loss is dramatically increased. In effect, your broker has placed all of your eggs in one basket. A broker who does not diversify his client's portfolio may be liable if that investment declines in value.

Call San Antonio Investment Broker Negligence Attorneys Cichowski & Gonzalez

Unsuitable investments, excessive trading and lack of diversification and many other types of broker actions could constitute fraudulent acts and a breach of fiduciary duty by a broker. If you think you may be a victim of broker fraud or misrepresentation, call Cichowski & Gonzalez. We have the experience and knowledge to determine if your broker has committed misrepresentation or fraud and can help you seek a recovery through arbitration. Most cases will have to be arbitrated through Federal Industry Regulatory Authority (FINRA) and not in any state or federal court. We have the experience to navigate the FINRA arbitration rules and regulations to successfully arbitrate your case.