Americans are extremely invested in the stock markets. In fact 55% of Americans have stocks that are owned by individuals or mutual funds along with equities within their 401(k)s and IRA’s which accounts for nearly 300 million individuals! This isn’t a surprise since it’s one of the ways to make your money grow more quickly than other forms. But the controversy around this practice has arisen from fraud or theft, as well as corruption and improper activities by those employed by brokerage companies.
A trend that is growing
Financial professionals were shocked to learn that prominent brokers had been accused of bilking clients. What is your investment’s safety? It is important to understand the various obligations that a stockbroker has towards his/her clients to know how much security the investor is from fraud.
We’ve all been awestruck at the sight of famous figures from this business routinely taken to prison following charges of fraud and bribery. However it seems like there will be no end to the injustice until justice is restored.
Legal Responsibilities
Financial relationships can be complicated. One such relationship is identified in the term “fiduciary obligation” or ‘fiducia right’, which refers to someone who manages money on behalf of someone else as their agent and guardian until they’re able to protect themselves from any harm that may result from the position being over simply friendship but isn’t necessarily legalized as it is in certain cases where it does exist strictly speaking, but these kinds of circumstances are extremely rare.
If you’re looking for more intricate crimes and lawsuits that could befall the registered representative, they are often tied to investment advisers. Advisors are required to plan your financial future and not trade in securities, fiduciary duty applies to them. But that doesn’t mean they aren’t required to be mindful. Stockbrokers can still be subject to civil or criminal charges for misconduct. But the manner in which these cases are handled differs from when dealing brokerages that don’t have a level dedicated to protecting customers’ rights as proportional thirds.
What is Fraud?
The term broker fraud refers to those who lie or deceive their clients, or steal client assets, and other violations. Churning is when you trade excessively only to help brokers gain more profit by bringing down your total costs , while not providing any value that is greater than what someone else could do to make them better at less expense and it’s a joke.
A person can bring an action for compensation in the event that they have to forfeit their retirement savings or funds due to the aforementioned fraud, misdeed or incompetence when it comes to an investment. Because investors are forced into arbitration, with binding clauses that prohibit them from taking the matter into court, most cases which involve loss of money are resolved by having lawyers argue over what’s left behind instead of having lengthy processes under oath which everyone is able to hear your screaming.
For more information, click securities fraud attorneys