Timely Execution of Orders
Investors hire brokers because they want a trusted professional to help them make smart decisions about their finances and how to handle their money. This includes providing investors with honest input regarding investment decisions that they are considering, refraining from taking actions that are intended to benefit the broker or brokerage firm, and being candid with the investor at all times. One of the most important duties that a broker has is to execute orders that an investor gives to them in a timely fashion. If a broker fails to take timely action based on an investor’s wishes, the investor may lose out on the financial opportunity that they intended to capture, or losses they wanted to limit. This can have adverse consequences for the investor’s accounts. At the Law Office of Steve A. Buchwalter, our Los Angeles securities fraud attorney has substantial experience assisting investors with determining whether their broker violated a duty of care. If you were burned by your broker, we are ready to help you fight for the compensation that you deserve.Brokers Owe Their Clients the Highest Duty of Care
A claim involving a broker’s failure to execute an order can involve many different scenarios. Some of the most common types of orders that brokers fail to execute involve buying or selling a stock, executing a stop loss order, or making other trades. Other instances may involve financial elder abuse. If you requested that your broker take some action regarding your investment accounts and money, but your broker failed to take this action in a timely fashion, you may be able to bring a negligence claim against the broker and their brokerage firm to recover the money that you lost as a result of the failure to execute. This rule stands even when the broker has advised the investor client against taking a particular action. After providing their professional opinion regarding the investor’s order, the broker is still bound to complete the order in a timely fashion if that is what the investor desires.
Since brokers are sophisticated parties, and since many investors lack substantial knowledge of investments and trading, the law imposes the highest duty of care on brokers to act as fiduciaries when it comes to managing their clients’ money. They are also required to follow many rules and regulations established by FINRA. This fiduciary duty involves being honest, ensuring that investors understand the status of their accounts, and putting the client’s best interests above the broker’s best interests. This duty also requires brokers to warn clients against potentially unfavorable investment moves and to carry out an investor’s wishes after informing the investor of all possible foreseeable outcomes. Additionally, federal regulations require brokers to keep records of any and all orders that investors provide, as well as copies of any documents granting the broker the power to make decisions regarding the client’s accounts without prior approval. If the broker knowingly failed to execute the order, you may have a claim for broker fraud.Recovering Compensation from a Careless or Fraudulent Broker
In a negligence action against your broker, your attorney must show that the broker failed to act according to the fiduciary duty of care imposed upon them in failing to execute your order. To help establish this, it may be necessary to create a timeline and to provide copies of any communications or documents evidencing the order and when the broker should have executed it. This is one reason why it is usually a good idea to keep written records of your communications with your broker or to follow up on conversations in writing to create a record.
If you are successful in showing that the broker failed to use due care in executing your order, you are entitled to receive financial compensation. This is usually calculated by estimating the value that your accounts would have had if the broker had acted in a timely fashion and then subtracting the actual value of your accounts. If the broker was working for a brokerage firm at the time of the incident, you may also be able to assert a claim against the brokerage firm. Federal and state laws hold brokerage firms liable for the conduct of their broker employees. A dedicated investment fraud lawyer can assist you with determining your potential rights against your broker and brokerage firm.Discuss Your Rights with a Securities Lawyer in the Los Angeles Area
At the Law Office of Steve A. Buchwalter, our lead attorney has over 20 years of experience representing investor clients in Los Angeles, Orange, Santa Barbara, and Ventura Counties, including in Beverly Hills, Pasadena, Irvine, Newport Beach, Santa Barbara, and Ventura. As a result of this experience, he understands how stressful and damaging this situation can be for you, your family, and your financial well-being. We offer a free consultation to help you learn about your legal rights, so call us or contact us online.