According to FINRA, the securities industry watchdog and largest forum to resolve securities disputes, the most 10 common most common types of securities fraud for 2013 are listed in order.
1. Breach of fiduciary duty—a financial advisor or brokerage firm putting their own interests before the clients
2. Negligence—sometimes a financial professional simply makes a mistake
3. Misrepresentation—for example, misrepresenting the risks of a particular investment
4. Failure to supervise—brokerage firms sometimes fail to sufficiently monitor their
employees
5. Breach of contract—clients account is not managed in the manner agreed
6. Unsuitability—recommending and investment that is not appropriate for the client
7. Omission—fail to adequately disclose all the risks or other pertinent facts
8. Unauthorized trading—brokers are required to get your authorization before
purchasing any investment
9. Excessive trading/Churning—trading for the explicit purpose of generating
commissions
10. Margin Problems—margin substantially increases risk and can be unsuitable for some
clients
The foregoing information which is publicly available on FINRA’s website has been provided by The White Law Group. The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Boca Raton, Florida. For more information on the firm, visit http://whitesecuritieslaw.com.
Tags: common securities disputes, FINRA dispute resolution statistics, securities fraud lawsuit, Top ten frauds, Top ten securities fraud, types of securities fraud Last modified: July 17, 2015
[…] Unscrupulous brokers may mislead or even lie to you regarding the risks of a particular investment. In some cases, brokers portrayed investments as “safe” or make guarantees, and may even omitted pertinent information. In addition to misrepresentation, broker misconduct can include negligence, breach of contract, and unsuitability to name a few types of securities fraud. […]