SEC Finding Spotlight: May 2019
When you hire a broker or brokerage firm to oversee your financial investments, you are placing a serious amount of trust in their abilities. You are also banking on the fact that the person or firm will not take advantage of your trust or lack of expertise. Although many brokers and brokerage firms render top quality assistance to investors, there are some who see the profession as an opportunity to exploit others for their own financial gain. At the Law Offices of Steve A. Buchwalter, we have guided numerous investors through the civil claims process after they discover that they have suffered financial harm as a result of their broker’s intentional or negligent conduct. A seasoned Los Angeles securities lawyer at our firm can help you assert your rights.Brokers Have Complete Control Over Your Accounts
Brokers and brokerage firms often take complete control of their investor clients’ assets. Despite the freedom that many people derive from this arrangement, it can create plenty of opportunities for a broker or brokerage firm to exploit the investors’ trust. Even if you are comfortable with your broker and are confident in his or her abilities, it is still a good idea to check on your account periodically to ensure that it is being managed according to your specifications.
Recently, Emanuel Omar Avina, a Corona, California broker working at Purshe Kaplan Sterling Investments, was the subject of a Financial Industry Regulatory Authority (FINRA) investigation in which it was alleged that Avina impersonated customers of his brokerage firm during telephone calls. The alleged reason for these calls was to request copies of checks and to obtain account information so that Avina could carry out transactions and other requests. Avina was setting up a new advisory firm and many of the transactions were performed so that the clients’ money could be transferred to the new holdings. Although some clients were aware of the impersonations, many others were not. As a result of the investigation, Avina agreed to a $7,500 penalty and was suspended from engaging in securities-related activities for 45 days.Seek Compensation for Financial Abuse
If you find out that your broker or brokerage firm failed to handle your accounts appropriately, including incidences of fraud or negligence, you can bring a civil claim to recover compensation for your damages. An experienced securities lawyer in Los Angeles can represent you in this kind of case, which would occur in addition to any investigation that FINRA launches regarding the improper conduct. The law holds brokers to the highest duty of care, describing them as fiduciaries who must protect their clients’ best interests and operate with complete candor when managing their clients’ money. To recover compensation, you must show that the broker or brokerage firm managing your accounts failed to act according to this duty. This can include making transactions for the purpose of generating fees, which is also known as churning, failing to diversify accounts or protecting assets, and making misrepresentations about the viability of certain investments.
Under a legal theory called vicarious liability, brokerage firms can be held liable for the negligent and intentional fraudulent acts that their brokers commit during the course and scope of employment. FINRA imposes a number of rules on brokerage firms when it comes to exercising thorough oversight of employees to ensure that they are abiding by the rules and making appropriate securities-related decisions. If a brokerage firm fails to adopt a reasonable oversight program, it can also be held liable for your losses. A knowledgeable Los Angeles securities attorney can answer any questions you have about holding your brokerage firm legally responsible.
If you are successful in showing that the broker and/or brokerage firm failed to act with appropriate care, you must show that this failure was the direct and foreseeable cause of your losses. If the broker and/or brokerage firm can point to some other factor that caused your harm, such as a sudden crash in the market, then the broker and/or brokerage firm may not be held liable. As for damages, you are entitled to the difference between the actual value of your account and the estimated value that your account would have had if the broker and/or brokerage firm had acted appropriately.Seek Guidance From a Dedicated Securities Lawyer in Los Angeles
Few things are more aggravating than finding out someone you trust has exploited your confidence in their abilities. As a seasoned securities negligence and fraud attorney, Steve A. Buchwalter has helped numerous individuals throughout the region to understand their rights against a broker or brokerage firm. We provide a free consultation to discuss your situation and proudly serve clients throughout Beverly Hills, Hollywood, Malibu, and Pasadena as well as in Santa Barbara, Ventura, and Orange Counties. Call us at (818)-501-8987 or contact us online to schedule your appointment.