Investment & Securities Fraud Lawyer

The Law Offices of Christopher H. Tovar, PLLC also represents investors who have lost money due to the mishandling of their accounts by brokerage firms.

Investment fraud can take many forms, including negligence, i.e., incompetent advice, misrepresentation or flat-out lies (or lies by omission) about stocks, variable annuities and other investment products, conflicts of interest in recommending investments, and other failures in carrying out their fiduciary duty to investors.

Brokerage firms often get their brokers to sell unsuitable investments to customers, i.e., small-cap technology stocks to retirees or people close to retirement. Unsuitability is the most common form of investment fraud.

Brokerages often fail to supervise their brokers altogether, letting brokers overconcentrate a customer’s account in a few stocks or other investments. Overconcentration, even in a blue-chip stock like Coca-Cola, Microsoft, or Johnson & Johnson can lead to investment losses than can decimate a retirement account.

Failure to supervise can lead to even worse problems. Brokers can engage in excessive trading in your account, also known as churning. Churning means buying and selling investments in your account to the point where you’d have to make a few hundred percent just to break even after commissions are paid to the broker.

Another problem is when brokers engage in what is called “selling away.” Selling away happens when a broker sells you an investment that his or her firm does not know about or authorize. The broker will ask you to communicate with them on a different phone number or email address to avoid having the brokerage firm know what they’re selling. Brokerage firms can often be liable for failing to supervise the broker in these situations as well, even though they had nothing to do with the investment. In some cases, brokerage firms can be found strictly liable.