Los Angeles Broker Fraud Lawyers Protecting the Rights of Investors
Help for California investors who sustained losses as a result of broker negligence or manipulation
Every investor hopes that he or she will happen upon a one-of-a-kind opportunity, creating wealth seemingly out of thin air. However, such investment opportunities are quite regularly too good to be true. Such opportunities normally arise from a Ponzi scheme or some other form of broker fraud or misconduct.
The Frankowski Firm assists investors with recognizing, addressing, and recovering from broker fraud. We focus on working with our clients through all legal avenues to gain recompense in cases of broker fraud. We can’t turn back the clock and prevent the poor treatment, but we can fight diligently to help you recover your financial losses and to hold the broker or brokerage firm accountable for their incompetence or negligence.
What can broker fraud look like?
Some types of broker fraud prey on the goodwill of inexperienced investors, others by the suave persuasiveness of the broker. Despite the myriad configurations broker fraud can appear in, what follows are the most frequently seen types of broker fraud:
- Breach of fiduciary duty. Any time a financial advisor put his or her interests ahead of those of the client, and therefore fails to recommend suitable investments for a client’s portfolio, the advisor has breached the financial duty that the broker/investor relationship relies upon.
- Failure to diversify. Lack of diversification within a client’s investment portfolio is also known as overconcentration. The associated risks are that, if there is an economic downturn or a decline in one field, an overconcentrated portfolio may lose significant value very quickly. A reputable investment firm or broker will encourage clients to make sure to include a variety of types of investment selections.
- Selling away. According to SEC regulations, investment firms are only allowed to sell the securities they hold or are authorized to sell. When brokers overlook their firm’s regulations and sell unauthorized investments, they and the firm are both liable: the broker for the breach of his or her duty, and the firm for its failure to supervise.
- Ponzi schemes. Ponzi schemes involve income being derived primarily from the recruitment of new investor’ money, rather than through the sales of any specific product. The alleged profits come to an end when no new investors are willing to buy in.
- Account churning. This is the excessive and unnecessary trading of a client’s account by a broker for the sole purpose of collecting commission fees. While at first there may be purported reasons given for the frequent sales and purchases, these are flimsy and easily fall apart under scrutiny.
- Failure to supervise. When brokers engage in fraud, they are not the only parties at fault. Frequently the investment firms they work for have neglected to properly supervise the broker to ensure adherence to regulations, such as FINRA’s.
- Suitability claims. The guiding principles for a stockbroker or investment firm must be the client’s needs and wishes. Usually, these needs encompass investment objectives, risk, tax status, investment time horizon and liquidity needs. When these obligations are not respected, the investment firm or broker is engaging in unsuitable trading.
If you have been a victim of one of the many kinds of broker fraud, turn to the California broker fraud attorneys at The Frankowski Firm today.
Shrewd Los Angeles broker fraud attorneys bulwark genuine investors
Brokerages and investment firms are instructed to serve their investors to the best of their ability; unfortunately, many do not. We work on behalf of clients who have lost money through the actions of a brokerage or investment firm. Call The Frankowski Firm at 888.741.7503 or complete or contact form to discuss your options for recourse.