Did you rely on a broker, advisor or financial report? Did you lose money on the investment? 
Did you pay commissions? 
Was the investment appropriate for your portfolio?
"Market downturn" may not explain your loss.     

Below are a list of terms commonly used to characterize broker misconduct. If you believe that your broker or financial institution acted improperly, do not hesitate to contact us. 

Churning
Definition: Your broker engaged in excessive trading on your account to generate commissions.
Evidence: The trading pattern in your account was excessive.
Review: Calculate the annualized rate of return that would be necessary to cover the commissions charged in your account and the number of times the equity in your account was turned over to purchase securities.

Unsuitability
Definition: Your broker has a duty to only recommend investments and trading strategies that suit you.
Evidence: You do not have the financial ability to incur the risk associated with a particular investment, the investment did not match your financial needs, or you lacked knowledge or understanding of the risks associated with the particular investment.
Review: Analyze the risk that you can or cannot assume, the tax implications of the investment, your prior experiences, your willingness to assume risk, and your anticipated rate of return. Your broker must act accordingly and only make recommendations that are both appropriate and suitable for you.

Price Manipulation
Definition: Artificially increasing or decreasing the price of a security for the purpose of generating profits to a particular group.
Evidence: Bad news is circulated, value drops dramatically, securities are purchased and later sold for profit when good news is circulated.
Review: Recall the nature of the information provided to you and whether you were permitted by your broker to sell or buy as desired by you, not as demanded by him.

Failure to Sell
Definition: You were prevented from selling a security.
Evidence: Your broker simply fails to follow your explicit instructions to sell a security.
Review: If this is the case, your broker violated Federal and State securities laws and the Rules and Regulations of the National Association of Securities Dealers or New York Stock Exchange.

High Pressure Tactics
Definition: Employing high-pressure sales tactics utilizing misrepresentations and omissions in the sale of securities.
Evidence: Aside from the obvious nature of a high pressure sales pitch, this involves a common scheme whereby a "junior" broker contacts you by telephone to recommend a small investment in a blue chip company. Once you accepted the "bait" and opened an account, is not uncommon for you to be referred to a more "senior" broker. In reality, the second broker is no more than a high-pressure salesman, skilled at parting you from your money.
Review: Recall whether you received a cold call, or whether you were initially lured by conservative trades, then pressured into more risky investments or house stocks (i.e. over-the-counter, quoted on NASDAQ, companies possess low revenues and insignificant or negative earnings).

Breach of Fiduciary Duty
Your broker is your agent. As such, he owes you certain duties that can best be determined by evaluating the relationship between you and your broker in its entirety. Some factors include; (i) your level of sophistication as an investor; (ii) your prior investment experiences; (iii) the representations of your broker; and (iv) your ability to verify the broker’s representations. In any event, your broker always has a duty to deal with you in a good- faith manner and to execute all direct orders in a precise and accurate fashion.

Excessive Concentration
Your broker cannot ignore the benefits of diversification in this volatile market. Too much concentration of your portfolio only invites disaster. Failure by your broker to diversify your portfolio may make him liable to you.

Misrepresentation and Non-Disclosure
Your broker cannot misrepresent material facts or fail to disclose material facts to you. Such action or failure by your broker hides the risk associated with the particular investment.

On-Line Trading Claims
Claims relating to on-line trading frequently have merit. In fact, the Federal and State government has become involved to review the following factors: (i) Whether you were permitted to engage in trades that were grossly in excess of your disclosed financial resources and prior investment experiences; (ii) Whether your orders were both properly executed and reasonably priced; (iii) Whether you had access to your on-line account during periods of heavy market volatility; and/or (iv) Whether you were given a false impressions through advertisements of the advantages and nature of the on-line services being offered.

Disclaimer:
The information contained in this web site is provided solely for general interest and may not reflect current legal developments and therefore should not be relied upon or construed as legal advice. Further, the sending or receipt of this information does not create an attorney-client relationship between us. For more specific, comprehensive and up-to-date information, or for help with particular factual situations, you should seek the opinion of legal counsel. Reproduction, distribution, republication and/or retransmission of material contained within this web site is prohibited unless you have obtained our prior written permission. Your communication with us through this web site may not be considered as privileged or confidential.

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