There are several ways in which an investor might become the victim of illegal broker activity. It can be easy to invest your money with a professional and then pay little attention to the details as the months and years go by, but unfortunately there are brokers who take advantage of their clients and put their clients’ money at risk.
One common violation is when a broker looks out for their own interests rather than their clients’ interests, usually because they are more concerned about boosting their commission than doing what’s in your best interest. If a broker pushes an investment product on you because it gets them a higher commission, or if they excessively trade in order to earn more commission and fees (“churning”), it’s considered a breach of their fiduciary duty. This is the duty they have to put your interests first. If there is a violation, and you suffer financial loss as a result, you can bring a claim against them and/or their brokerage firm.
Although some securities fraud cases end up in court, many are handled in arbitration. You likely agreed to arbitration when you signed on for an account with your broker. This means that you will file a claim with the Financial Industry Regulatory Authority (FINRA). Arbitrators hold hearings and make final decisions much like a judge. Your best bet is to hire an experienced Illinois securities fraud attorney to represent you during arbitration. The broker will most certainly have a lawyer on their side.
If a broker promises or guarantees a certain rate of return on an investment, it can be fraudulent misrepresentation. If a broker puts your money in riskier investments than what you authorized, you might have what’s called a suitability claim. Both of these are additional instances of illegal broker misconduct that can lead to a claim or lawsuit.
It can be difficult for the average investor to identify fraud or other illegal activity being committed by their broker. If something doesn’t seem right, look into it by talking to an Illinois securities fraud attorney. If they know what they’re doing, they should be able to identify whether you’ve been taken advantage of.
If you have further questions about actions taken by your broker, or if you would like to speak with an Illinoissecurities fraud attorney, please contact us.
Written by Michael Helfand