| November 18, 2019
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 Using outdated or incorrect information as a basis for current recommendations may render the broker liable for losses that occur as a result of unsuitable recommendations.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 contact form.