When you work with a financial advisor, a securities broker, or a registered brokerage firm, you have the reasonable expectation that you will receive reliable, good-faith investment advice. Sadly, financial professionals do not always live up to their legal obligations. Far too many innocent investors sustain major losses due to portfolio mismanagement or outright securities fraud. If you believe that you were the victim of investment fraud in Northeast Ohio, it is imperative that you consult with an experienced Cleveland attorney immediately.
Galvin Legal, PLLC’s experienced investment fraud attorneys are committed to protecting the legal rights and financial interests of investors. We have helped many investment fraud victims nationwide recover losses. Even when an investor lives in Cleveland, Ohio, the claim must generally be filed through the Dispute Resolution division of FINRA. Investors are far more likely to recover their losses if they are represented by an attorney who is experienced in securities arbitration. If you think you may be a victim of investment fraud, please contact us today to set up your free investment fraud consultation. Galvin Legal, PLLC represents investors in every state across the nation.
Examples of Broker Misconduct and Investment Fraud
There are many different specific causes of action that can be raised to support an investment fraud or broker negligence claim. Some common examples of misconduct that can be used as the basis for a legal claim include:
- Breach of Fiduciary Duty: Certain financial advisors have a legal obligation to act in the best interests of their clients. However, contrary to the belief of some investors, stockbrokers are not covered by the fiduciary duty standard. Instead, they are covered by the suitability rule.
- Unsuitable Investment Advice: Under FINRA Rule 2111, brokers must offer investors suitable recommendations and guidance. Stockbrokers cannot push investors into financial products or investment opportunities that are inappropriate for their individual objectives and needs.
- Unauthorized Trades or Transactions: Before making any trade on behalf of an investor, a financial professional must obtain authorization. This can be done in the form of a standing agreement (discretionary account) or by checking with the investor prior to each transaction (non-discretionary account).
- Lack of Diversification: A well-managed portfolio must be properly diversified. When financial professionals over concentrate an investor’s assets in a particular investment or sector of the company, they may be exposing the investor to serious, avoidable risks. Financial advisors can sometimes be held liable for this type of portfolio mismanagement.
- Misrepresentations or Omissions: Investors cannot make wise decisions without fair, honest information about stocks, bonds, and other financial products. Brokers and brokerage firms must avoid misrepresenting investment opportunities to investors.
- Failure to Supervise: Brokerage firms can be held legally responsible for the fraudulent or negligent conduct of their securities representatives and other associated persons. FINRA mandates that broker-dealers must have an effective supervisory system in place.
Investor Losses Claims in Cleveland, OH: Understanding FINRA Arbitration
For the most part, investors in Cleveland, Ohio must resolve any claim against their broker or brokerage firm through FINRA arbitration. Essentially, FINRA arbitration is similar to a private, mini-version of a trial. That being said, there are many specialized rules and procedures involved in FINRA arbitration claims. Investors who have sustained major losses should seek help from a Cleveland securities fraud lawyer who has experience handling FINRA arbitration claims.
Contact Our Cleveland Securities Fraud Lawyer Today
At Galvin Legal, PLLC, our Cleveland investment fraud attorney proudly serves communities throughout Northeast Ohio. If you sustained significant investment losses, you may be eligible to recover financial compensation. For a free, no strings attached review of your FINRA arbitration claim, please reach out to our law office by calling 1-888-637-5518 or contacting us directly through our website.