The stockbroker breach of fiduciary duty, more commonly referred to as the duty of fair dealing, is a law that requires brokers to always be working in the best interests of their investors.
You might think that this should go without saying, and you’re right. But unscrupulous stockbrokers are more common than you might be aware of, and in some cases, these brokers are even encouraged by their brokerage firms to engage in misconduct, as long as they are bringing in a profit.
Below, we examine what the elements of the duty of fair dealing are and what your options are for obtaining restitution when you’ve suffered substantial stock losses due to broker misconduct.
Elements of the Duty of Fair Dealing
For a stockbroker to uphold their fiduciary duty, there are certain responsibilities they have to uphold regarding their investors. To start, brokers must always make suitable investment recommendations. The broker must have reason to believe that the recommendations they make align with their investors’ objectives as outlined in their investment portfolio.
What’s more, stockbrokers are obligated to do their due diligence and research potential investment opportunities, ensure that securities are being traded or sold at fair market value, and inform their investors of opportunities that may be a conflict of interest.
If a stockbroker engages in conduct that does not adhere to the duty of fair dealing and you suffer as a result of this recklessness, your broker should be ordered to repay you.
How to Hold Your Dishonest Stockbroker Liable for Your Stock Losses
There are several different ways you can go about bringing your scheming stockbroker to justice, but the most commonly sought resolution is through FINRA arbitration. The Financial Industry Regulatory Authority (FINRA) accepts complaints and hears cases of alleged stockbroker misconduct.
Your lawyer will present evidence to prove your broker has breached their fiduciary duty so you can ideally be awarded the restitution you’re entitled to.
Speak with a Stockbroker Negligence Attorney
If you have questions about how to initiate a FINRA arbitration claim, you can consult with a regarded stockbroker negligence lawyer at Meissner Associates. You can meet with an experienced attorney who can learn more about the individual details of your case. Just call our office at 212-764-3100 or fill out our quick contact form to schedule your meeting.