Fighting Back Against Broker Misconduct
Brokers have a duty to place their clients' interests ahead of their
own. When a broker engages in excessive activity, typically for the purpose
of generating additional commissions, the broker violates that duty. This
violation means that both the broker and the brokerage firm may be held
liable for any losses that arise out of such excessiveness.
What is excessive?
Excessiveness is typically determined by evaluating your account's
annual turnover rate and the "break even" or "cost-equity"
ratio of the account. According to both the SEC and the courts, a turnover
rate of over 6% is excessive per se. However, with a vast majority of
standard turnover rates being below 1%, excessive activity may be proven
at a significantly lower rate. Standards also exist that determine that
most accounts requiring at least a 15% annual return to "break even"
meet the definition of "excessively traded."
However, even if it can be established that your account has experienced
excessive activity, for liability to exist, an
investment fraud lawyer must prove that the broker had effective control of your account. Proof
of control may be established through a written document granting the
broker control of your account or by showing that you relied so completely
on the advice and recommendations of your broker that the broker was effectively
responsible for the number of transactions in your account and their frequency.
Meyer Wilson: Your Investment Fraud Attorneys
To ensure your excessive activity claim is handled effectively, you need
investment fraud lawyers with a proven track record of excellence. Meyer
Wilson has years of experience practicing solely in our field, assisting
the victims of stockbroker fraud as the focus of our firm. As a result,
we have honed the strategies and skills needed to aggressively pursue
the largest investment firms in the nation. Despite the best efforts of
brokerage firms to make themselves out-of-reach of litigation, Meyer Wilson
has helped over 800 clients recover
hundreds of millions of dollars from the firms that mishandled their investments and assets.
Smart trading is based largely on quantifiable data. Trading simply because
you've been inactive lately or trading based primarily off of impulse
or hunches more closely resembles gambling than wise investing. Your financial
advisor should be able to explain to you the reasons for every move they
make with your hard-earned money. If they are engaging in activity simply
to increase their commissions, then a stockbroker fraud attorney can step in.
Meyer Wilson has successfully served the interests of clients nationwide,
including major U.S. cities like Cleveland, Los Angeles, San Diego, Dallas
and Tampa. We typically help investors who have suffered financial losses
in excess of $75,000. For assistance with your excessive activity claim,
call an investment fraud lawyer at our firm or complete our online form for a
free case evaluation.