SEC Finding Spotlight: September 2018
We trust our brokers and investment firms to keep our best interests in mind when they advise us about how to invest or money. If you are a novice or beginning investor, it can be hard to know whether the advice or services that you receiving are appropriate for your financial goals. As a result, many investors do not learn that they are being treated improperly until after the fact. Fortunately, legal recourse is available to investors who have been burned by their brokers, including civil claims to recover lost investment funds or profits. Los Angeles security lawyer Steve A. Buchwalter formerly worked in the securities industry and has substantial experience identifying situations involving broker or brokerage firm misconduct. If you think that your investments are being handled improperly, contact us today to set up a free consultation. We are happy to discuss your situation and how we might be able to assist you in obtaining the just outcome that you deserve.FINRA Rules Protect Investors
The Financial Industry Regulation Authority (FINRA) is a body designed to ensure that brokers and brokerage firms are playing by the rules when it comes to handling client accounts and making investments. FINRA conducts investigations and issues penalties against brokers who violate these rules. In a recent proceeding, FINRA permanently barred a broker, John Douglas Wade, of U.S. Bancorp Investments (Fullerton, CA), who misappropriated client funds totaling more than $105,000 from two elderly clients of the brokerage firm. Between February 2013 and July 2017, Wade transferred without authorization nearly $50,000 from a customer’s checking account to his own mortgage account. Wade also had checks written from the clients’ accounts for the alleged purpose of investing in REITs, but instead used those checks to pay his mortgage.
According to FINRA, this conduct constituted violations of FINRA Rules 2150(a) and 2010. The first rule prohibits the improper use of a customer’s securities or funds, while the second rule codifies standards of commercial honor and principles of trade. The latter rule requires brokers to use the highest standards of commercial honor and just and equitable principles when engaging in trade activities. Because Wade intentionally misused the clients’ funds to pay his own mortgage without consent from the client, he directly violated both of these provisions.Bringing a Civil Claim Against your Broker
If your broker engaged in unlawful conduct regarding your accounts and investments, you can bring a civil claim to seek recovery of the amount of money that you lost as a result of the conduct, and an experienced Los Angeles securities lawyer can help. In this claim, you will need to show that the broker failed to act with a high degree of fiduciary care in advising you regarding your investments and in managing your investment accounts. This includes both acts of negligence and carelessness and well as intentional acts of fraud and misrepresentation such as using your funds to pay personal expenses. Brokerage firms are also vicariously liable for the negligent or fraudulent acts that its broker employees commit in the course and scope of their job. Regardless of vicarious liability, brokerage firms also have independent duties to monitor their employees’ conduct and to ensure that everyone is abiding by applicable regulations.
If you are successful in establishing liability, you are usually entitled to compensation for your losses. It is typically calculated by determining the difference between the actual value of your account after the negligence or fraud and the estimated value of your account had the negligence or fraud not occurred. Having a seasoned investment fraud lawyer on your side can help you ensure that you pursue the full amount of compensation that you deserve.Diligent Securities Fraud Lawyer in Los Angeles
Whether you simply have questions about your broker’s conduct or you are certain that you have been the victim of carelessness or fraud, we are standing by to help you understand your legal rights as an investor. The rules surrounding securities and broker conduct can be incredibly confusing, especially if you are a new investor or have trusted your broker to act appropriately. Our team is prepared to handle a wide variety of legal matters including arbitrations and complex litigation. With more than 20 years of experiencing assisting clients throughout Beverly Hills, Encino, and Pasadena, we know just how much this situation matters to you and your family. To schedule your free consultation call us at 818-501-8987 or contact us online.