Broker Fraud Lawyers for Aggrieved Investors

Investment fraud, including broker and brokerage fraud, costs Americans between $10 billion and $40 billion every year. However, the true toll that broker fraud takes on investors may be even higher, since many victims either hesitate to come forward or are unaware of resources that are available to help them recover their lost funds.

Broker fraud attorneys can help change that. At Wolper Law Firm, we specialize in helping those who have been taken advantage of by their brokers or brokerage firms. We can help you recover stolen money, win damages against bad actors, and prevent others from being victimized. Contact our experienced broker fraud lawyers today for a complimentary consultation.

Broker Fraud Often Hits Unsuspecting Victims

Broker fraud costs investors not only their savings, but also their trust. Many who have been victimized by broker fraud are reluctant to re-invest, which in turn prevents them from building wealth and limits their financial potential for years to come.

Our broker fraud lawyers are all too familiar with this pervasive problem that affects investors from all walks of life. Broker misconduct can ruin retirement incomes and derail other savings goals. Brokerages process billions of dollars in investment transactions every day, leaving room for fraud, negligence, and other abuse by dishonest brokers. Regulatory organizations, including the Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and the state and federal governments, investigate complaints of broker fraud, which claims many unsuspecting victims every year.

While these agencies investigate complaints and may take actions such as issuing fines and suspending licenses of brokers and firms, aggrieved investors who want to get their money back must typically take action through a FINRA claim or a civil lawsuit.

What is Broker Fraud?

Broker fraud can take many different forms, many of which are not easy to spot. Many broker scams target passive investors, new families with multiple priorities, or older investors. Many types of fraud prey upon investors who are less financially experienced or who have less time, inclination, or ability to proofread financial statements.

Broker fraud often refers to misrepresentations made by stockbrokers or financial services professionals that cost investors when they should not. Broker fraud can be as clearcut as Ponzi schemes, sham investment opportunities, and embezzlement, or as veiled as recommending unsuitable investments or insider trading. At times, brokers may “churn” commissions for themselves by executing an inappropriate amount of trades in order to earn themselves fees. The limits of broker fraud are only bounded by unscrupulous actors’ imaginations.

Not all brokers are not bound by a fiduciary duty to their clients. However, they are still obligated to recommend suitable investment opportunities to those who work with them. If your broker neglects your best interests or sidelines them in favor of their own earnings or prospects, you may have a case of broker fraud on your hands.

How to Know If a Broker is Legit

Preventing financial fraud starts with due diligence on your end. Not every financial professional will be the right match for your investment needs. Furthermore, there are unfortunately many unscrupulous brokers who continue to operate in today’s investment landscape. To protect yourself, Wolper Law recommends that you:

1. Be wary of solicitations: Cold calls, emails, and unsolicited offers are often warning signs of an unprofessional brokerage firm. Approach solicitations with caution when making investments.
2. Use FINRA BrokerCheck: Online broker reviews are a useful method to confirm that your broker is in good standing with their professional memberships. FINRA BrokerCheck is run by the independent, non-profit organization overseen by the US Congress to hold financial actors accountable. FINRA BrokerCheck can offer information about open or past complaints, and ensure that you are choosing a reputable financial professional. Other resources include the Securities and Exchange Commission (SEC) Investment Advisor Public Disclosure forum, as well as state securities regulators’ webpages.
3. Verify broker firm’s SIPC membership: The Securities Investor Protection Corporation insures investors for up to $500,000 should a firm close its business unexpectedly. This confirmation is similar to FDIC protection for bank customers in the US. Brokerages should be registered with the SIPC for minimum protection, and some firms offer additional coverage.

Even when you have taken these three steps, be sure to check your financial statements regularly. Financial relationships depend upon transparency and open communication as well as shared trust to stay healthy.

Online Broker vs. Traditional Broker

Like many other businesses, brokerages have also developed online options in recent years. Online brokerages are now a viable option for many clients looking to start investing for the first time, or build their portfolios.

Online brokers often offer more flexible hours, more freedom for investors, as well as at times lower fees for transactions. However, they should still be verified through SIPC membership, and researched thoroughly before you link bank accounts and choose to invest.

What Does FINRA Do?

FINRA oversees and regulates registered brokers and brokerages in the United States. Both firms and individuals need to be registered with FINRA in order to conduct securities transactions. FINRA also investigates broker and brokerage fraud complaints. Violators pay fines and face suspension or termination of their registration when violations occur. They may also face criminal prosecution, depending upon all the circumstances.

FINRA reports that the United States has:

• 637,037 – Registered brokers and financial advisors
• 3,378 – Securities firms
• 79.7 Billion – Market transactions processed every day

FINRA requires brokerage firms to provide customers with written notifications of trade confirmations during or prior to the transactions. Brokerages also must provide account statements so that clients can review transactions and ensure they authorized each one. Unfortunately, many investors do not review their account statements regularly, or at all, so they do not recognize that fraud has occurred until it is too late.

Know Your Broker: Occurrences Of Broker Fraud In The US

With so many registered brokerages processing billions of dollars in daily transactions, which FINRA refers to as “market events,” there is ample room for broker fraud to occur. In 2023, FINRA reports, it brought 610 disciplinary actions against registered brokers and firms for unethical behavior. FINRA also ordered $88.4 million in fines from fraudulent activity, of which $7.5 million was paid out directly to harmed investors. Over 620 insider trading and broker fraud caseswere referred to the SEC for prosecution through FINRA action.

Exercise Diligence To Help Stop Broker Fraud

In many cases, more than one firm services an individual investor’s account. For example, one firm may deal directly with investors, provide advice, and take trade orders, while another firm will execute those trades on the market. Each step in a financial transaction is an opportunity for someone to commit fraud. Unscrupulous firms and their brokers can collude together to steal investors’ money, or they can act alone. But they all depend on concealing their actions.

The diligent investor is the enemy of the fraudulent broker. Careful recordkeeping is the best protection against fraud.

Investors should obtain statements from all firms that service their accounts and read them carefully. FINRA advises that statements may have subtle telltale signs that they have been doctored to conceal fraud. Account statements often are the best tool investors can use to detect and stop potential broker fraud. Brokerage account statements provide invaluable information, including account numbers, broker and clearing firm contact information, and a summary of investment holdings. If you see anything that looks suspicious on your account statements, do not ignore it. Ask your broker or the brokerage firm about it; if you do not get a satisfactory answer, consider contacting a broker fraud attorney.

FINRA Red Flags: Broker Fraud

• Inconsistent end dates and statement periods, or no end date or statement period listed
• Account numbers that change suddenly, or assets that are suddenly missing
• Incorrect address and account information, or incorrect ownership information.
• Improper or completely missing disclosures
• Phone numbers that are disconnected, always busy or never answered
• Unknown brokers listed, no clearing firm information provided, and unknown dividend or interest income sources
• Unrealistic account performance, such as always reporting gains
• Excessive or strange fees, or unauthorized transactions listed.

How to Detect Broker Fraud

The value of investments made via brokers and brokerages are tallied at the end of each statement period and mailed to respective account holders. If a change in your account numbers or other standardized information suddenly occurs, FINRA advises contacting your brokerage firm right away to correct any issues. If the faulty information continues, broker fraud might be the problem. Warning signs to look out for include:

• Account statements without brokerage firm contact information: Account statements must also include account performance information, such as income, dividends, deposits, withdrawals, and maturity dates for bonds. Following them closely helps investors track their money and locate potential issues that might indicate broker or brokerage fraud.
• Monthly statements without portfolio details: Portfolio details often include breakdowns of investments by asset class, bond insurance ratings, yield, and unrealized gains and losses. The monthly statements should enable investors to ensure the investments made are in accordance with their goals.
• Missing disclosures and definitions: These areas define and disclose the various codes and language used in statements and help investors understand the information provided. Statements should include explanations of various types of investment accounts, as well as pertinent fee structure. Any detailed or revised information should include definitions, explanations, and other vital data.

The bottom line is that as an investor, you should pay careful attention to your statements. Many people never look at their statements, or they only read the summary page. If you see a trade you did not authorize or another discrepancy, it could be a sign of fraud, or it could simply be a mistake. But you can help prevent yourself from being a victim by calling the issue to the attention of your brokerage house. If the answers you get are not satisfactory, talk to our broker fraud attorney.

Most Common Examples Of Fraud Committed By Brokers

FINRA’s Investor Complaint Center receives complaints across the nation from investors concerned about broker fraud or other problems with their investment brokerages. FINRA investigates investor complaints to determine whether or not likely violations of the nation’s securities laws and financial regulations might have occurred. FINRA reports that the most common investor brokerage fraud problems arise from four sources.

• Misrepresentation is the most common form of securities fraud and occurs when a brokerage firm or broker makes material misstatements or fails to disclose material facts in connection with the purchase or sale of securities. Common examples of misrepresentation include the failure to accurately disclose risks or conflicts of interest and making false promises or assurances regarding investment performance.
• High-pressure sales tactics occur when brokerage firms or brokers aggressively push prospective and existing clients to purchase securities and/or deposit assets to be managed by the broker. Most frequently, high pressure sales tactics are accompanied by false promises regarding investment performance and a misrepresentation regarding the characteristics of the investment. Senior investors and retirees are the most common targets.
• Unsuitable investment recommendations refer to the purchase or sale of securities that are inconsistent with the client’s investment objectives and risk tolerance. The recommendation of “aggressive” securities in the account of a “conservative” investor or the recommendation of illiquid securities in the account of an investor who requires access to his/her capital are common examples of unsuitable investments.
• Unauthorized trades occur when a brokerage firm or broker purchases or sells securities in a customer’s account without first obtaining authorization. Most often, a broker who engages in unauthorized trading does so for the purpose of generating additional commissions.

Our Broker Fraud Attorney Seeks Maximum Compensation From Investors

Unfortunately, as the numbers highlight, stockbroker fraud and misconduct happen all too frequently. But as these statistics also show, many brokers get caught and pay the price for their misdeeds, as they should. If you have lost significant money due to a dishonest broker or brokerage firm, you may be able to get restitution by filing a claim for arbitration or mediation through FINRA. While making a claim through FINRA is often the most desirable way for an investor to recover their money, in some situations a civil lawsuit through the court may be a viable option. Once we learn the unique details of your case, we will advise you about the best option for your circumstances. Our experienced broker fraud attorneys have recovered money for investors in over 99% of claims. Contact us to learn more about how we may be able to help you, too.

When brokers fraudulently take the hard-earned dollars of innocent investors, they should be held to account for their actions. We work hard to maximize the value of every case we handle.

Not Sure Where to Turn? Tips to Choose a Broker Fraud Attorney

You may be able to bring a claim to seek recovery of your money. At Wolper Law, we offer:

• Relevant experience representing investors: The FINRA arbitration process is a powerful tool to recover lost or stolen investor funds, but it does not offer an appeals process. You only have one opportunity to ensure that you put forwards the most complete case for compensation. Our broker fraud attorneys can help.
• Relevant testimonials from past clients: Like working with a brokerage firm, working with a law firm involves a professional relationship built on trust, discretion, and expertise. Wolper Law recommends that you read what clients have to say before engaging any legal or financial services.
• A track record of success in holding brokers accountable: Past success does not guarantee future outcome, but it is a good indicator of our expertise in the field and dedication to our clients.
• Free consultation to investors: We provide free consultations to investors and will listen carefully to your concerns to help you discover if you have lost money due to the actions or inactions of an unscrupulous broker and/or brokerage firm.

Don’t Wait If You Suspect You’ve Been Cheated: Talk To a Broker Fraud Attorney Today

Many people do not report schemes and fraud because of embarrassment or the stigma of being duped. In other cases, investors who have been defrauded might not even understand whether fraud really occurred or even realize that they were victimized. If they questioned their broker about something suspicious and were assured that there was nothing wrong, they may not have the industry knowledge necessary to further question the “professional” or accuse them of wrongdoing. Talking to a broker fraud attorney can help catch signs of fraud early and give you the outside eye you need to halt wrongdoing in its tracks.

No investor should ever feel embarrassed about being taken by a bad broker or not understanding whether they were victimized. The securities industry is extremely complex, and people who work in it every day know its intricacies. The dishonest players know how to manipulate the complexities to make money through fraudulent schemes.

Sadly, elderly people are among the most vulnerable when it comes to broker fraud. Elderly people who have saved throughout their lifetimes for retirement often have more assets, so they are more likely to be targeted. They may also have longer-standing relationships with their financial professionals, leading them to stop reading statements and ask fewer questions. But no matter whether people are seniors or younger, if they have money to invest, they can become victims of unscrupulous brokers seeking to line their own pockets.

How To Sue a Broker For Fraud

Many victims lose all hope of recovering their lost investment money and try to put the matter in the past. The problem is, for many victims of investment fraud, doing so is nearly impossible. That is because the effects of investment fraud last a lifetime.

With the help of a brokerage fraud attorney, writing off the loss does not have to be your only option. Report securities fraud with the help of the experts at Wolper Law by:

• Gathering as much evidence and information as possible: Building your claim begins with keeping a file on information about the broker. This can include your account statements, any documentation from opening your account or suspicious transactions, emails and messages, and more.
• Keeping records of all conversations with the broker: Whenever possible, keep a record in writing of directives you have given your broker and information they have shared with you about the state of your accounts. Print out emails or take screenshots of exchanges.
• Reviewing the applicable laws and regulations: You do not have to be an expert in securities law and brokerage policies with the help of a skilled stock broker fraud attorney. Share with us any documents you have signed and any brokerage policies you have consented to when you bring your case to Wolper Law. We can help contextualize them within the scope of FINRA regulation and applicable federal and state laws.
• Assessing the damages suffered due to the fraudulent broker’s actions: Bring copies of your account statements and information about any relevant recent market fluctuations that apply to your claim to your consultation with an attorney.
• Consulting a broker fraud attorney: A stockbroker fraud lawyer can help identify whether someone was defrauded by their broker’s negligence or intentional actions. Wolper Law Firm attorneys offer free consultations that can help you understand the best way forwards if we find you have a claim. If you do wish to report a fraudulent broker, we can help guide you through litigation as well as alternative dispute resolution methods, such as arbitration.

Broker Fraud Attorney: FAQs

Investment Fraud Is Stealing. Don’t Ignore It. Contact a Broker Fraud Attorney For Free Consultation

If you need help with stockbroker fraud, contact our offices to find out how we can help. The attorneys at Wolper Law Firm are available for a complimentary consultation about the facts of your FINRA broker fraud case.