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more_legal_areas stock_fraudA stock fraud lawsuit is a legal option for investors who have been the victims of stock fraud. Stock fraud lawsuits can be filed against stock brokers or dealers, financial advisors or planners, and corporations or shareholders. Private investors may also be charged in a stock fraud lawsuit when they act on inside information to benefit from trade interaction.
Stock fraud is regulated by the Federal SEC, or Securities and Exchange Commission, a number of state regulatory agencies and self regulatory agencies. Federal law requires that stock/investment companies be open and honest about their business and the stocks they offer. Stock brokers and other stock professionals are required to act fairly and honestly in their business transactions by providing true and reliable information to their clients. If a stock professional fails to act in accordance with federal law , they may be held liable for any damages they cause in a stock fraud lawsuit.
There are a few ways that a stock or investment professional can commit fraud. Churning, or excessively trading stocks for personal or company gain, is a fraudulent act. When a stock broker recommends stock options or investments that do not meet the needs of a particular client, s/he may be liable in a stock fraud lawsuit. If a stock professional concentrates too much of an investor''s portfolio into one trade sector or type of trade , they may be liable for damages that ensue. Misrepresentation, omission, or any other misleading information provided to an investor is fraudulent. Stock fraud lawsuits may also be filed in cases of misappropriation where the legal professional intentionally stole investor money and fabricated losses, or falsified records to cover it up.
In a stock fraud case, the help of a specialized attorney can be your greatest asset in recovering what you have lost. Often times a stock fraud case will be handled in arbitration and may be settled before it ever becomes a stock fraud lawsuit. Upon establishing a relationship with a stock professional, most investors must agree to handle any future disputes through arbitration. It is important to consult with a stock fraud attorney prior to the arbitration proceedings. There are several benefits and some drawbacks to settling a stock fraud case through arbitration which your legal professional can advise you about.
Class action lawsuits may be another option, particularly in circumstances where the investor has lost a relatively small amount of money. In some situations a stock fraud lawsuit may be the best course of action. It is wise to seek an experienced and qualified legal expert to develop a strong stock fraud lawsuit with you.
In all legal action against fraudulent stock professionals, you have the legal right to seek compensation for your damages. A stock fraud attorney can advise you of your legal rights and options in a stock fraud lawsuit and help maximize and protect your interests.
A recent Securities and Exchange Commission (SEC) survey of 15 large brokerages shows that 13 of them appeared to give preferential treatment to fund companies from whom they received financial compensation. Techniques ranged from featuring the fun...