Featured Investigation: October 2020

When we contact a broker to handle our financial investments, we don’t think about all of the rules that the broker must follow and whether he or she is abiding by them. What we usually think about is whether the broker will help us achieve our financial goals and achieve the security that we are hoping for. Even if you are an experienced investor with some understanding of how the rules work, you may not always be able to know whether your broker is playing fair. This creates chances for the broker or brokerage firm to take advantage of investors for their own financial gain. Finding out that your broker took advantage of you can be an incredibly painful experience especially if you lost a significant amount of money as a result. If you were burned by your broker, contact Los Angeles securities lawyer Steve A. Buchwalter as soon as possible to start learning more about your rights.

The Financial Industry Regulatory Authority (FINRA) is responsible for creating and enforcing rules that are intended to keep the investment industry fair and safe for investors. Some of these rules are simple and involve things like obtaining a client’s written consent to engage in certain investments. Others are more serious and prohibit brokers from duping their clients or cheating their brokerage firms.

Recently, FINRA investigated and charged an Oxnard, California, broker who was found to have violated FINRA rules. The broker in question is Jose A. Yniguez of Transamerica Financial Advisors. Between March and November 2018, Yniguez worked as an assistant to a founder and chairman of a company. He received payment for his work. This consisted of an outside business activity that he was required to disclose to Transamerica. He should have obtained Transamerica’s written consent to engage in the outside business activity before doing so.

Yniquez also invested in the company during this timeframe and eight of Transamerica’s clients invested in the company. The individuals invested $99,900 in the company and Yniguez received $1,600 in compensation as a result. These deals constituted private securities transactions that required written prior notice or written prior approval from Transamerica. Yniguez’s conduct violated a number of FINRA rules, including Rule 3270. This rule governs when brokers can engage in outside business activities and requires the broker to give prior written notice to the brokerage firm.

As a result of these violations, Yniguez was fined and suspended for a period of time.

The first step to seeking justice after you’ve been burned by your broker is to speak with an experienced lawyer. There are a number of things that you have to prove to receive compensation from the broker and/or brokerage firm that caused you harm. First, you have to prove that the broker owed you a duty. In general, brokers owe their clients a fiduciary duty to manage their accounts with integrity and to engage in complete candor with the clients. Next, you must show that the broker failed to act according to that duty. Because the broker’s duty is one of the highest fiduciary standard, brokers are required to abide by all FINRA rules and regulations. If a broker did not abide by a FINRA rule, it can serve as evidence of a violation of the standard of care.

After showing a lack of appropriate care, you must prove that the broker’s conduct was the direct cause of your damages instead of some other factor. Finally, you will be entitled to receive compensation equaling the difference between the value of your account after the fraud or negligence and the estimated value that your accounts would have contained had the broker acted appropriately.

Attorney Buchwalter is a former registered stock broker, giving him unique experience and insight into handling your broker fraud or negligence claim. He has assisted individuals throughout Southern California including Malibu, Pasadena, Beverly Hills, and Los Angeles. You deserve justice if a broker burned you when managing your accounts. To set up a consultation call his office today at (818) 501-8987 or contact him online.