Broker Dealer and Investment Advisor Claims

Federal Law protects investors from certain illegal Investment Broker/Dealer activities. If you believe you have or may have been the victim of Broker/Dealer violations call the lawyers of the Law Offices of Matt & Allen as soon as possible. Complaints may be made to the Financial Industry Regulatory Authority (“FINRA”), a government-authorized not-for-profit organization that overseas U.S. broker-dealers.

Potential issues that may need to be addressed:

  1. Slow execution or execution of investment orders at an unanticipated price or failure to execute a buy or sell order. There is a prohibited conduct which includes recommending the purchase or sale of a security that is unsuitable given the customer’s age, financial situation, investment objective and investment experience.  Investment in a particular security may be unsuitable or the amount or frequency of transactions may be excessive and therefore unsuitable.  (;
  2. Purchasing or selling the security without customer authorization. The broker/dealer must have written discretionary authority to effect transactions in the account or was given discretion as to price and time.  Absent this authority in writing a cause of action could lie.
  3. Switching a customer from one mutual fund to another without a legitimate investment purpose.
  4. Misrepresenting/failing to disclose material facts about an investment; this should include the risk of investing in a particular security as well as the charges or fees involved. It may also need to include the company’s financial information, technical analysis or bond ratings.
  5. Removing funds from the customer’s account without authorization.
  6. Charging a customer excessive mark-ups or mark-downs or commissions on the purchase or sale of stock.
  7. Guaranteeing a customer they will not lose money on a particular transaction or making a specific price prediction or agreeing to share in any loss in the customer’s account.
  8. Private security transactions between the broker and the customer that violate FINRA rules; particularly the transactions done without the knowledge or permission of the broker’s firm.
  9. “Trading ahead” – trading for the firm before entering the customer’s limit order without having a valid exception.
  10. Failure by the market maker to place a customer limit order.
  11. Failure to uses reasonable diligence to see that the client’s transaction is executed at the best price given prevailing market conditions.
  12. Purchasing or selling stock while in possession of material, non-public information about an issue.
  13. Using manipulative, deceptive or other fraudulent methods to effect the transaction or induce the purchase or sale of a security.

Liability often occurs when there is an unregistered or complex security that is sold. (e.g. a REIT or an unlicensed investment in some “deal” or small business).  The more complex a financial transaction the more likelihood it gives rise to a claim.

If you believe you have or may have been the victim of Broker/Dealer violations call the lawyers of the Law Offices of Matt & Allen as soon as possible.

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