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How Does Stockbroker Fraud Work?

David P. Meyer

An experienced investment fraud lawyer explains more about stockbroker fraud and looks at the most common types of investment misconduct.

Big Ponzi schemes and fake investments aren’t the only ways fraudsters take advantage of unsuspecting investors. Some unscrupulous brokers may take a more subtle approach and try to engineer their clients’ accounts to line their own pockets on the sly.

When it comes right down to it, stockbroker fraud is essentially a broker acting in his or her own interest rather than acting with your interests in mind. We hear about this frequently at Meyer Wilson.
Here are some of the most common types of stockbroker fraud:

  • Unsuitability. When a broker recommends an investment, he or she should be taking your financial situation and goals into account. If he or she does not, and you end up losing money, you may have a case for misconduct.
  • Misrepresentation/Omission. If your broker leaves out important facts or gives misleading information about an investment, it may be fraud.
  • Churning/Excessive trading. This trick is used by some unscrupulous brokers to generate extra commissions for themselves at their clients’ expense.
  • Unauthorized trading. When a broker makes trades without your permission, it may be considered broker misconduct.

If you believe that stockbroker misconduct led to your investment losses, speak with an experienced investment fraud lawyer today. Meyer Wilson has helped investment fraud victims nationwide recover their losses, and we want to put our resources and experience to work for you and your family.

For more information about spotting Ponzi schemes and stock scams, request your FREE copy of our book Five Signs of Investment Fraud …And What to Do if it’s Happened to You.