Most Victimized Investors Don’t Know Their Rights

Stockbroker Law - Wednesday, December 14, 2011
Most Victimized Investors Don’t Know Their Rights
Investment fraud and stockbroker fraud takes many different shapes and forms, and most investors don’t know their rights under the Securities Law.  Wrongful trading activity in the accounts of the everyday American investor can include account churning, private placement fraud, breach of fiduciary duty, annuities fraud, stock manipulation, unauthorized trading, and embezzlement.  

Securities fraud can also include a Ponzi scheme, involving variable annuities, as well as wrongful activity related to retirement and IRA accounts.  When serving as an IRA custodian for financial accounts, trustees and custodians under IRS §408(b) also owe additional contractual obligations, as well as being required to follow the “Know Your Customer Rule” of the Financial Industry Regulatory Authority (FINRA) and certain other types of retirement accounts subject to ERISA, the Employee Retirement Income Security Act.  Responsible individuals and financial institutions owe a fiduciary duty under ERISA to their customers to protect customer/employee accounts from excessive risk, lack of diversification, and unnecessary losses.

Personal injury lawsuits also give rise to investor victimization when settlement proceeds for personal injury lawsuits have been lost through investor fraud, margin trading, account churning, annuities fraud, stock manipulation, stockbroker fraud, unauthorized trading, securities fraud, and embezzlement.

The Office of Dispute Resolution of FINRA provides securities arbitration proceedings designed to resolve disputes between victimized investors and their financial advisors.  Investors can seek relief for violations of the Prudent Investor Rule, in addition to various statutory remedies such as New York State’s Prudent Investor Act under §11-2.3 of the Estates, Powers & Trusts Law of New York State (EPTL).  Additionally, financial professionals also have access to FINRA securities arbitration for dispute resolution in matters involving wrongful termination.

We offer a free initial consultation to investors who suspect that they may have been victimized by their financial advisors.


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