Instances in Which Investors Can Sue Their Brokers for Stock Losses
It is no longer a secret that investing in the stock market is one of the most surefire ways to make a lot of money. But just like most other investments, there also are risks involved being an individual investor. One of the most common risks is when you see yourself as a victim of negligence, fraud, or error by your own stock brokers.
In the world of stock market trading, it is a fully-accepted fact that when the improper or deliberate actions of a broker leads to stock market losses for the investor, which in this case is you, it means you are entitled to getting 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. Thankfully, you won’t have to fight on your own. 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 you do have to understand that it is not always immediate that you can easily sue your broker. But it also doesn’t mean you won’t hire a good securities lawyer unless you’ve decided to sue. The thing is not all stock brokers are under 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. It is therefore best not to work with an unregistered broker as you might find yourself at the wrong end of the relationship.
There’s a good chance you’re in for a court or legal battle in case your broker fails to execute trades. Because stock brokers literally can’t make money based on commission if they don’t place opening orders, it means that they likely won’t fail in this 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. In other words, if you demanded to trade but the broker failed to execute the same, it only means you can ask for a stock market attorney’ advice on how to recover your losses.
One other case in which you might be able to sue your stock broker is if he makes an unauthorized trade, something that’s actually quite the opposite of the first scenario. 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.