Laws: 10 Mistakes that Most People Make
Stock Market Losses: When To Sue Your Broker
It’s no secret that the stock market is one of the most efficient and proven ways to make a lot of money. But as an individual investor, it also can’t be denied that there are risks involved in it. One of the most common risks is when you see yourself as a victim of negligence, fraud, or error by your own stock brokers.
In times when the actions of a stock broker lead to you, the investor, losing money, there’s an unwritten rule that says you should be entitled to receiving financial compensation. But the obvious problem here is that it’s difficult to prove that your broker’s actions led to the losses. But there’s a solution for this. The best course of action is to hire a stock market lawyer; someone who is equipped with the skills and experience to do a thorough investigation, the purpose of which is to prove that your losses are in fact connected to the misconduct of the stock broker.
But then again, you also have to know that you can’t just easily sue your broker. But it also doesn’t mean you won’t hire a good securities lawyer unless you’ve decided to sue. Know that not all stock brokers are subject to the concept of fiduciary duty. This means that they might not be obligated at least in the eyes of the law when it comes to putting their client’s best interests before their very own interests. With this in mind, it’s obviously better for you to talk about this before choosing any broker, and also, try to avoid working with an unregistered stock broker as much as possible.
Anyway, if your broker fails to execute trades on your behalf, that’s a sign that you could be in for a legal battle. Considering the fact that stock brokers earn by way of commission through placing opening orders to purchase stocks or conduct short sales, it’s easy to assume that they’d be careful enough not to fail in this part of the job. However, there might be instances in which orders get lost due to negligence or silly mistakes and when it happens, they fail to execute trades. But if there is one thing you need to keep an eye on is the tendency of some brokers to intentionally refuse to place closing orders, knowing through experience that they might be able to make more money should they wait it out. Simply put, if you requested a trade but the broker failed in his job in executing it, you can resort to asking a stock market attorney’s advice on how to recover your losses.
One other case in which you might be able to sue your stock broker is if he makes an unauthorized trade, something that’s actually quite the opposite of the first scenario. In other words, if the broker makes trades using your account without your consent, then it is enough ground to ask for compensation for your losses in the stock market.