Facing securities fraud or negligence is emotionally and financially catastrophic. Whether you are a broker or investor, it is easy to find yourself in the middle of a federal securities fraud investigation. When this happens, you need to consult with an experienced federal securities fraudlawyer. They will guide you on the best course of action.
Federal Securities Fraud Charges
There are instances when a broker trades excessively to get commissions. Extensive trading is considered illegal when the broker does it outside the investment objectives, financial needs, and resources of the client. You can make a churning claim if you provide evidence that the trading made on your account was excessive and against your previously agreed investment objectives. This especially happens when the broker has control over your trading account. A churning claim is also valid if you can prove that the broker acted in reckless regard to your interests. If you are an investor and you notice many transactions that are counterproductive to your to financial gain, you can talk to a fraud lawyer to ascertain if you have a valid claim.
Front running is also referred to as forward-trading. This happens when a broker intentionally delays their client’s order for their financial gain. Securities trading requires one to act fast to profit. There are instances when you may ask your broker to buy a particular stock mostly in large amounts. Forward trading happens when the broker tactfully delays in order to purchase personal shares. The broker aims to benefit when the stock prices go up. It is hard to prove front running especially if you do not have an experienced lawyer. If you have suspicions that your broker or their firm is front running, a fraud lawyer can help bring this to light. Such a charge requires in-depth investigations. This is best left to fraud lawyers who possess the expertise and resources required to prove your claim and help you recover your money.
A broker is not authorized to execute a trade without the client’s approval. Brokers are liable for securities fraud if they trade securities without your approval. This is also sufficient ground for the client to sue. When an investor issues an approval, it is best if this is done in written form. This makes it easier to prove that they acted against your wish. It is important to note that there are exceptions to authorized trading. For instance, if the client has a margin account, then the broker can trade based on their discretion. If you find yourself accused of making an authorized trade, then you need to get representation. The same applies to a client.
Omissions and Misrepresentations
It is unlawful for a broker or brokerage firm to omit or misrepresent facts or material information about stock or security. The information is deemed material if the disclosure would have had an impact on the decision made by the investor. Omissions and misrepresentations refer to inaccurate information or fraudulent research about the investment risks of a particular stock. If a client suffers loss due to such omission or misrepresentation, then they have ground to file. A fraud lawyer can help you secure the monetary damage owed to you.
In most cases, securities and stock disputed are handled out of court. These disputes are arbitrated. This is often a private session where all interested parties hold a meeting. The sessions can include a panel of experts who assess the claims made. The experts issue a binding decision once they have heard the merits and demerits of the charges. Having a lawyer present in the arbitration is important. The lawyer must be experienced in securities and especially the arbitration bit. In most states, these sessions are led by the Financial Industry Regulatory Authority (FINRA).
It is important to note that these cases are technical and complex. The panel must factually and legally analyze all facts presented. While you may have investment knowledge, this is not enough to present and win a case against a broker or brokerage firm. You stand a better chance if you let a professional lawyer handle the case. They will work to ensure that you recover all damages.
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