Wall Street stockbrokers and brokerage firms must employ a reasonable amount of diligence when giving investment advice and managing your assets. When they fail to do this and completely ‘drop the ball’ with regard to your accounts, it’s considered negligence.
Victims of stockbroker negligence do not have to prove that a broker purposefully or knowingly harmed them. Instead, you must show the specific mistakes that were made or the things your broker didn’t do but should have done, and how this resulted in your financial loss.
Harmed investors can hold their stockbroker and brokerage firm accountable for negligence through Financial Industry Regulatory Authority (FINRA) arbitration proceedings. If successful in your claim, you may receive full or partial compensation for your damages.
How Negligence Happens
Wall Street brokerage firms make billions of dollars by providing people with investment advice and management services. In most cases, brokerage firms and their employees do a great job, but occasionally they make mistakes. Unfortunately, when hundreds of thousands of dollars are involved, these mistakes can result in severe financial damages.
If mistakes were made because your stockbroker or brokerage firm weren’t doing their job properly, a claim of broker negligence can generally be made. In fact, claims relating to negligence are incorporated as a part of almost every customer/broker dispute. Typically, other legal issues will come into play as well, such as unsuitability, failure to supervise, omission/misrepresentation and failure to follow instructions.
Here are some examples of how broker negligence can happen:
- An investment advisor over-concentrates a conservative investor into one sector of the economy, even though this sector was in jeopardy at the time.
- A stockbroker recommends an unsuitable or overly risky investment after failing to consider an investor’s unique circumstances and needs.
- An investor suffers massive financial damages because his brokerage firm failed to warn him or take immediate action to correct an obvious problem.
- A brokerage firm does not sell your investment in a timely fashion and it results in damages.
- A brokerage firm fails to properly supervise a stockbroker and prevent fraudulent actions from happening.
- A brokerage firm or stockbroker neglects your account in any number of ways, resulting in financial damages.
Bringing Negligence into Perspective
Every year, financial services companies help millions of Americans prepare for retirement and live out their golden years in comfort. A hundred years ago, brokerage services like this weren’t available to the average consumer, but today they’re quite affordable and effective and many people are benefiting from them, particularly inexperienced investors.
However, even savvy and well-informed investors hire brokerage firms because they don’t have the time to research potential investments, watch the news, and monitor the status of every aspect of their accounts.
It just makes sense to go to the expert when you don’t know your best course of action. People employ doctors and mechanics for the same reason.
But what happens when the expert makes a mistake? What if your mechanic drives your car into the lake after fixing it? What if your doctor operates on the wrong leg, injuring you as a result? Common sense says the mechanic should replace your car and the doctor is guilty of medical malpractice.
One small mistake by a stockbroker can devastate your financial situation in an instant. If your stockbroker accidentally recommends a stock that’s widely known to be worthless, buys you an investment that’s too risky for your objectives and needs, or commits any number of mistakes that cause you to lose money, you may have a very strong claim to get your money back.
If your broker makes a big mistake and your brokerage firm neglects to fulfill its obligation out of negligence, you should contact an attorney and preserve your right to compensation.
Try and Get Your Money Back
If you’re a victim of negligence, your brokerage firm may be legally bound to make you whole again. Pursuing a stock fraud negligence claim will also teach Wall Street brokerage firms that every customer, no matter how small his bank account, requires the utmost diligence, attention, and care. Your claim may even prevent others from suffering as you have by forcing Wall Street brokerage firms to conduct business in a more responsible fashion.
Contact Us
You may be eligible to receive compensation regardless of whether you sold or continue to hold the securities at issue. Contact us today to set up a free consultation. We will listen to your story, answer any questions you may have and discuss your legal rights and options.