SEC Finding Spotlight: October 2019
One of the most common ways many people seek to protect their financial future and to achieve their investment goals is to work with an investment broker. Many of us lack the time and expertise to understand nuances in the market, making it easier to put the health and well-being of our finances in the hands of a trusted advisor. Although most brokers take the fiduciary responsibility that this relationship carries quite seriously, some see it as a chance to take advantage of unsuspecting investors for their own personal gain. Los Angeles securities attorney Steve A. Buchwalter has multiple decades of experience assisting investors with determining whether they are entitled to compensation after a case of broker negligence or fraud. We know how stressful this situation can be and how hard it often is to determine whether you’ve been mistreated by your broker. Contact us as soon as possible to get started.Engaging with Brokers for Financial Transactions
If your broker approaches you about getting involved in a deal that does not involve his or her existing broker-dealer, you should proceed with caution. This can be a very risky financial move because it potentially violates key regulations designed to promote integrity in the securities industry. Outside business activities are usually unregulated and unreported, leaving you exposed. The Financial Industry Regulatory Authority (FINRA) is responsible for overseeing the activities and dealings of brokers to ensure that they are acting in compliance with the many rules and regulations FINRA produces. A securities lawyer serving Los Angeles area investors can help you understand the way FINRA regulations function.
In a recent disciplinary proceeding, FINRA engaged in an enforcement action against broker Kevin J. Murphy who was associated with brokerage firm Electronic Transaction Clearing of Los Angeles (ETC) in Southern California between 2007 and 2017. According to the complaint, Murphy engaged in undisclosed private securities transactions and other business dealings independently of his firm.
The complaint also states that Murphy, who acted as President and CEO of ETC, did not give prior written notice to ETC that he was participating in a $500,000 investment deal with another entity called Velox Securities. The complaint states that Murphy contacted two individuals who owned a corporation that was a customer of ETC’s to provide the $500,000 in funding for Velox Securities so that it could become a member of FINRA and to operate as a clearing firm. In 2016, Murphy also allegedly engaged in additional undisclosed transactions on behalf of Velox securities while at times acting as an officer of Velox Securities. Although Murphy left ETC in January 2017, three days later he appeared as a registered representative of Velox Securities of Anaheim. His registration at Velox Securities terminated in July 2017, but his employment is listed with Velox Clearing.
FINRA has accused Murphy of participating in undisclosed private securities transactions in violation of ETC’s written procedures that prohibit this kind of conduct by any persons associated with the firm without providing prior notice in writing and an acknowledgement from the firm. Murphy also reportedly received compensation for work he did on behalf of Velox while still registered with ETC.Taking Legal Action Against a Broker
If you were involved in an unlawful financial transaction with a broker, you may be entitled to compensation, and experienced Los Angeles securities lawyer can help you hold your broker responsible. This requires bringing a negligence and/or fraud action against the broker and showing that he or she failed to act with the same level of fiduciary care that a reasonable and prudent broker would have used. If you are successful in showing that the broker failed to act according to this standard, you can receive compensation in the amount of the difference between the actual value of your account and the estimated value that your account would contain had the broker acted appropriately. Another key step of this is showing that the broker’s improper conduct was the direct cause of your losses as opposed to some other factor in the market.Meet with a Tenacious Securities Fraud Attorney in Los Angeles
If you suspect that your broker’s conduct has caused you to lose money due to his or her negligence or fraud, contact attorney Steve A. Buchwalter to start exploring your potential options for recovery. He has assisted individuals throughout Beverly Hills, Newport Beach, Santa Barbara, and Irvine bring claims after losing money due to their brokers’ negligent or intentional breach of fiduciary duty. He offers a free consultation, so you have nothing to lose. Call now at 818-501-8987 or contact us online to set up your appointment.