On Attorneys: My Rationale Explained

By | June 19, 2018

Stock Market Losses: When To Sue Your Broker

It’s no secret that the stock market is one of the most efficient and proven ways to make a lot of money. But just like most other investments, there also are risks involved being an individual investor. One of those risks is getting victimized or defrauded by your own stock brokers.

In times when the actions of a stock broker lead to you, the investor, losing money, there’s an unwritten rule that says you should be entitled to receiving financial compensation. However, the fact that you’re an individual investment means that it’ll be very difficult to prove that the stock broker’s actions indeed led to your stock market losses. But the good news is you don’t have to be on your own in this fight. What you can do is hire a stock market lawyer, who in turn will be conducting a comprehensive investigation in order to determine if your losses are indeed connected or directly linked to a misconduct by your stock broker.

But one thing you need to realize is that you can’t just sue your broker once you feel like he’s done you wrong. But hiring an experienced security lawyer doesn’t necessarily mean you’re suing right away. Know that not all stock brokers are subject to the concept of fiduciary duty. What this actually means is that there are brokers, with respect to the relationship with investors, who aren’t legally obligated to put the client’s interests before their own. With this in mind, it’s obviously better for you to talk about this before choosing any broker, and also, try to avoid working with an unregistered stock broker as much as possible.

Anyway, if your broker fails to execute trades on your behalf, that’s a sign that you could be in for a legal battle. Considering the fact that stock brokers earn by way of commission through placing opening orders to purchase stocks or conduct short sales, it’s easy to assume that they’d be careful enough not to fail in this part of the job. But then again, negligence and silly mistakes can lead to orders getting lost and they end up failing to trade. But what you should be wary of are those brokers who will deliberately refuse to place a closing order with the hope that they might be able to make more money later on if they wait it out. Hence, in case you requested a trade but the broker didn’t execute it, you have the prerogative to go to a stock market lawyer’s office and get some advice on how you can recover your losses.

Another scenario in which the option of suing your stock broker opens up is when he does an unauthorized trading, something that’s literally the opposite of the first one. What this means is that if the broker trades using your account but without your consent, that right there constitutes enough reason to explore your legal remedies.

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