Stock Broker Fraud

Are you a victim of stock broker fraud or unethical financial practices? Unfortunately, in today’s changing economy, stock broker fraud has become increasingly prevalent. Victims of fraud and related investment irregularities are often trusting, generous and loyal people who are unaware of their brokers’ unethical actions until they’ve lost everything.

Chapman and Associates is dedicated to representing individual investors who are victims of fraud and unethical practices of their stock brokers and investment advisors.

What is Stock Broker Fraud?

Stock broker fraud is when a broker makes untrue statements or fails to inform investors of important facts in order to obtain money. Often stock broker fraud claims involve several types of fraud and tend to include claims against not only the stock broker but their brokerage firm and the company offering the investment product. The following list is an explanation of the most common types of stock broker fraud.

Most Common Types of Stock Broker Fraud

Suitability
When recommending a securities product, stock brokers are required to determine if the specific investment is suitable for the investor. Some of the factors they are to consider include the investor's age, income, assets and investment objective. If you have incurred losses as a result of stock broker’s unsuitable investment, you may be able to recover your financial losses through a suitability claim against the stock broker.

Overconcentration
Stock brokers have a duty to their clients to limit their risk through diversification of their investment portfolio. If a broker overconcentrates the investor’s portfolio in high risk investments, it may be fraud or negligence.

Churning
If a stock broker or investment advisor puts his/her interest in generating commissions from a client's investment before the interest of the client, it is churning. Brokers and advisors are paid commissions on the purchase and sale of investment products. If the turnover on your investments is too high, your stock broker may be churning and you may have a claim against that broker and the brokerage firm.

Unauthorized Trading
Unauthorized trading is when a stock broker trades an investor’s non-discretionary account without the investor’s permission. Unfortunately it is a common area of fraud despite it being a blatantly obvious type of fraud. It is often covered up with fraudulent documents to deceive the investor and can go unnoticed for years.

Negligence
Negligence is when a stock broker / investment advisor fails to exercise due diligence. Negligence claims often accompany other types of securities fraud claims.

Breach of Fiduciary Duty
Stock brokers and investment advisors have varying degrees for fiduciary duties to their clients. For example, investment advisors are held to a higher level due to the relationship and trust involved in offering advice and managing investment portfolios. When brokers or advisors abuse the trust and confidence of their investor, they have breached their fiduciary duty to the investor.

Failure to Supervise
Stock brokers are representatives of brokerage firms who are required by FINRA and the SEC to supervise their brokers in order to protect investors. Often stock broker and securities fraud cases have some degree of failure to supervise claims due to the duty that the brokerage firm has to monitor its agents. Failure to supervise is an increasing problem with “individual” brokerage firms who allow individual stock brokers and investment advisors to operate with very little supervision.

Other Types of Stock Broker Fraud
Broker Misconduct
Sale of Unregistered Securities
Misrepresentation
Conflict of Interest
Biased Advice
Ponzi Schemes

Our Experience

Unwinding the fraudulent practices of a stock broker or investment advisor is time consuming and technically difficult. Our shareholder, Ron Chapman, has over 25 years of litigation experience, a Master's Degree in administration with an emphasis in finance, and was previously a certified internal auditor. Our team of stock broker fraud attorneys have various backgrounds in finance and law and work together to create a powerful team.

The firm is currently handling the publicized case involving financial planner Keith Epstein. Click here to read about our financial fraud cases, including the $20 million case against Epstein and the $16 million case against Mutual Service Corporation.

How Can We Help?

Chapman and Associates accepts most cases on a contingent or modified contingent fee basis.

Links to More Information on Stock Broker Fraud
Federal Bureau of Investigation - White Collar Crime Division
FINRA - Tips and Tools for Investors
SEC - Office of Investor Education and Advocacy

Please call us at (248) 644-6326 to schedule a free 30 minute consultation with a stock broker fraud attorney in Michigan or (866) 238-0203 for a stock broker fraud attorney in Florida.

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