Securities Attorneys for Broker Negligence

Types of Broker Negligence 

• Breach of Fiduciary Duty: If a broker fails to act in the client’s best interest, this is considered a breach of fiduciary duty and a clear example of when an investor should contact a securities attorney for their expertise on broker negligence. Brokers are obligated to make decisions that will benefit the customer, and if they don’t, it is considered broker negligence. 
• Misrepresentations and/or Omissions: If a broker leaves out key information about an investment or misrepresents the risks of material facts, leading a customer to invest in a product or strategy they usually wouldn’t touch, this can be considered misrepresentation. Unfortunately, many investors do not discover the truth in such cases until they have incurred substantial losses and realize that the investment was not so safe in the first place. Clients should contact a securities attorney for assistance handling their broker negligence case as soon as they realize it.
• Failure to Conduct Due Diligence: If a broker fails to conduct due diligence on an investment product before recommending it to his clients, this is broker negligence. For example, The White Law Group currently represents many investors who have suffered damages as a result of the recommendation of their financial advisor to purchase private placement investments. Investors subjected to broker negligence typically seek securities attorneys from The White Law Group for counsel as they pursue damages through FINRA arbitration. We have found that in many cases, the FINRA-registered firms failed in their fiduciary duty to perform adequate due diligence and to disclose the risks involved with these investments. Brokerage firms that fail in this fiduciary duty may be liable to recover investment losses in FINRA dispute resolution claims. 
• Unsuitability: Unsuitability continues to be a leading cause of broker negligence suits. Suitability can be a contentious point between an investor and broker-deal, so clients often partner with securities attorneys for this type of broker negligence case. FINRA Rule 2111 requires, in part, that a broker-dealer or associated person “have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the [firm] or associated person to ascertain the customer’s investment profile.” 
• Failure to Supervise: Brokerage firms must supervise their advisors to ensure compliance with FINRA rules. Securities attorneys are often sought after for broker negligence cases involving brokerage failures to manage because they are well-versed in FINRA Rules. Suppose it can be determined that the financial advisor violated FINRA rules and the employers failed to supervise him adequately. In that case, these firms can be held responsible for any resulting losses in a FINRA arbitration claim.
• Overconcentration: If a broker fails to diversify the client’s account, this could also be considered broker negligence, as it could cause significant investment losses.
• Negligent Failure to Execute Trades: Clients also often contact securities attorneys for broker negligence cases in which an investor directs his broker to sell or buy an investment product, but it is not done.