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St. Petersburg Securities Litigation Lawyer

The relationship between a stockbroker and their client is termed a “fiduciary relationship.” Indeed, a fiduciary is “[a] person having [a] duty, created by his undertaking, to act primarily for another’s benefit in matters connected with such undertaking…a person having duties involving good faith, trust, special confidence, and candor towards another,” according to the Florida Bar Journal. As such, when a broker seems to act not in the best interest of the client, but in their self-interest or with malicious intent or negligence, that broker may be violating their duty of good faith. Brokers are never allowed to make decisions that hurt their client, or to advance their own finances at the expense of the client. If you have suspicions that your broker is violating their fiduciary commitment to you, you need legal representation at once. It can be difficult to spot malpractice on the part of a broker, and even more difficult to prove in court, which why an experienced St. Petersburg securities litigation lawyer is such an invaluable tool if you have been taken advantage of.

Violations of the Broker-Client Relationship

When you began working with your broker, you gave them specific goals and objectives to accomplish. This is the case with every broker or dealer relationship. As a stockbroker who acts as a dealer or broker, that individual was given a specific set of instructions. They may have been free to make trades on their own, or the client may wish to initiate or approve all trades made. In either case, the objective of the broker is to meet the demands of the client while, most likely, increasing their return investments based on the risk level with which the client is comfortable.

Common Broker-Dealer Disputes

Churning is not only unethical, but can be illegal as well in many circumstances. Excessive buying and selling of securities with the broker’s primary goal of generating commissions over the investor’s goals is detrimental to the client, but can be difficult to prove without a meticulous careful and observant legal counsel. Another common dispute is that of unsuitable investments. This occurs when the investor’s goals are not met by the broker, such as the risk level associated with each trade and the investor’s age or proximity to retirement. Brokers also have financial obligations. These duties are as follows, according to the U.S. Securities and Exchange Commission. Brokers must:

  • Maintain minimum amounts of liquid assets, or net capital;
  • Take certain steps to safeguard the customer funds and securities; and
  • Make and preserve accurate books and records.

Contact Our St. Petersburg Securities Litigation Lawyers

Brokers must disclose only truthful information to their clients, they must know their clients and make trades that align with their client’s goals, and they must only make investment recommendations that are suitable for their clients. When this fiduciary relationship is broken, legal action must be taken swiftly. Call the St. Petersburg securities litigation lawyers of Barbas, Nuñez, Sanders, Butler & Hovsepian today at 1-800-227-2275 if you suspect that your broker is committing fraud, is negligent, is omitting the truth, or otherwise committed professional malpractice.

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