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3 Types Of Broker Misconduct You Need A Securities Law Attorney For

When you seek ways to invest money, you will typically work with a broker who can invest your money, build a portfolio, and help you create a savings account that will last for years to come. Ideally, you want a broker who can complete these tasks without any issues.

In other situations, you may not be happy with the performance and actions of a broker. In these cases, you may seek out the services of a securities law attorney. The attorney can hold your broker liable for certain types of misconduct. Learn about three common forms of misconduct to look out for as you seek legal help.

1. Breach of Fiduciary Duty

A broker should not go into any financial situation with the blinders on. You do not want to make huge risks as you invest your money. A breach of fiduciary duty covers a broad range of actions. For example, a broker may invest your money in high-risk investments without informing you.

You may feel like a broker chooses investments on a whim and does not consult you over certain decisions. A securities law attorney can access all of the transactions for your account and see patterns of behavior like some major risk moves that you were not informed about. Through their knowledge, they can pick up on information you may not be aware of.

2. Lack of Diversification

A diverse portfolio will often help accounts in the long run. You can ensure that if you have losses in one area, other investments will continue to grow at a regular pace. If your broker continues to invest in the same investment, then a securities lawyer can give you help by charging a brokerage with a lack of diversification.

The high risks of a single investment could lead to issues with your account and building savings. A lawyer may seek personal advantages for a broker and separate motivations other than your own personal wealth growth.

3. Churning & Excessive Commission Fees

Churning is the act of excessive buying of stocks and investments. Every time a broker makes a transaction, they may receive commission fees. If a broker is constantly purchasing and selling stocks, then they could collect excessive commission fees for all of the transactions. In some cases, the churning may occur without your knowledge.

A securities lawyer will see the number of transactions and the commissions collected by your broker. Those fees can quickly add up.

Contact a law firm like Carter & West Law to learn more.