My broker recommended an investment that didn't fit my financial situation
and I lost money. Can I hold the brokerage firm responsible?
When a broker recommends investments that are inappropriate for your financial
situation, you may be able to recover your losses by holding the brokerage
firm responsible. This type of broker misconduct claim is known as “unsuitability.”
Your broker has the legal duty to recommend and sell investments that
are consistent with your investment objectives and goals, risk tolerance
and financial situation.
In order to comply with their legal duty to recommend only suitable investments,
brokers must continuously reevaluate the needs of their investor clients
before making additional investment recommendations. Using outdated or
incorrect information as a basis for current recommendations may render
the broker liable for losses that occur as a result of unsuitable recommendations.
Unsuitability claims are almost always handled in mandatory securities
arbitration before the Financial Industry Regulatory Authority (FINRA).
If you choose to pursue a claim, it is crucial that a broker fraud attorney
who is knowledgeable in this area of law represents you. Our broker fraud
lawyers have experience in arbitration, litigation, mediation and class
action lawsuits. For a free case evaluation, contact us by
filling out our online form.