Thursday, February 18, 2021

What to Do when You Think Your Stockbroker Is Cheating You

Stock markets
are full of brokers whose conflict of interest may dearly cost you if you are not very keen. Such brokers are out to swindle you out of your money. You are probably wondering what to do when you think your stockbroker is cheating you. 

With all the technicalities surrounding stock trade, it is hard to tell if your stockbroker is cheating you out of your money or leading you into an inappropriate investment that will lead to massive losses. However, a stockbroker fraud lawyer from Wolper Law Firm will be in the best position to handle this for you.

With their vast experience in dealing with stockbroker fraud, their lawyers can spot fraud and help you build a case that will ensure you receive refunds for all your losses. But even before you approach your lawyer, here is a list of what to do when you think your stockbroker is cheating you.

What Are the Signs to Look for in a Cheating Broker?

1. Misrepresenting and Omitting Facts

Suppose your broker intentionally held back important information such as risks, sales-related compensation, liquidity, or other material facts. In that case, you need to be keen to ensure that your broker is not deceiving you.

2. Unauthorized Trading

Unauthorized trading is when your broker makes purchases with your account without your prior approval. The only time your broker is allowed to transact on your behalf is when you give them expressed and detailed permission or if they receive discretionary authority. If your broker transacts without these two conditions, it is possibly an investment fraud. 

3. Churning

When looking through your account, do you notice any repeated sales of the same stock? If you do, and your broker has been in control of your account, churning has occurred.

Churning is where a broker sells and resells your stock to increase their commission regardless of what is best for you. This is one of the most rampant fraudulent deals that brokers indulge in.

4. Untimely Execution

Does your broker tend to delay executing your orders on your investments, or sometimes fails to execute them at all? If he or she does this, the law considers him or her to be a fraud. There could be ulterior motives causing your broker to make these delays.

5. Illegal Accounts

Suppose your broker has ever suggested that you lie about your home or work address or that you use misleading information while making your investments

In that case, there is a high likelihood that they are involved in fraudulent deals that you don’t want to be dealing in. Who knows, they are probably deceiving you too.

What Action Should You Take?

Upon establishing that you are indeed a victim of a fraudulent broker, it is best to take immediate action against your broker.

1. Report the Fraudulent Broker

To start your funds recovery process, you should report your broker to the relevant authorities, like the SEC, for their cheating tendencies. Reporting them will also stop them from taking advantage of other investors.

2. Hire a Broker Fraud Lawyer

Fraudulent brokers can be very elusive people to deal with. To get the justice and compensation you deserve from your failed investment, you need a qualified lawyer to take you through the entire process.

What Does Not Count as Cheating?

You should always bear in mind that all investments, at some point, suffer losses. Yours is, therefore, no exception. It would be best if you were very keen before you make assumptions and accusations.

It may greatly help if you seek your lawyer’s guidance before suing your broker for fraud. Wrongful suing may lead to great consequences such as a defamatory lawsuit against you, which will further lead to unnecessary losses on your part.

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