When you make an investment, in addition to your financial assets, you’re also placing a lot of trust in the hands of a brokerage firm, fiduciary, or financial advisor. The expectation is that they have your best interests in mind. The stockbroker’s duty is to give sound advice based on your financial goals and act in your best interests regarding your investment. This is the basis of the fiduciary relationship between broker and investor, and there are certain ethical and moral obligations placed on the fiduciary to ensure that your investment is in safe hands.
Unfortunately, some fiduciaries may take advantage of you as a client, using the financial assets that you’ve placed in their hands for their own benefit and financial gain. A fiduciary’s actions regarding your investment must be free of personal bias, without conflicts of self-interest. This means a fiduciary may not use your principal investment for financial gain. The fiduciary must make investment recommendations based on your personal financial goals rather than what will most benefit the brokerage firm.
This also applies to corporate assets, corporate property, and corporate opportunities. A fiduciary may not use any of your business assets for financial gain. If a fiduciary does get involved with misusing corporate funds for their benefit, this may also result in fraud, based on the specific actions of the fiduciary. This is why it is crucial to make sure that all corporate decisions regarding investments be considered and agreed upon by the Board of Directors or executive board of the company in question.
It may be somewhat difficult to prove that fraud is involved, as it would be necessary to prove that the intent was of a criminal nature. Breach of fiduciary duty, however, is much more straightforward to prove in a court of law. The only proof that is necessary to win a breach of fiduciary duty case is that the broker was in a fiduciary position and broke the trust instilled into that position by taking advantage for their own personal financial gain.
The FINRA arbitration lawyers of De Castroverde Law Group can help represent your interests in the following types of investment loss cases:
Unfortunately, when companies do not follow the standard set of rules and regulations laid out by FINRA, investors may suffer the consequences and this is where De Castroverde Law comes in.
When you make an investment you’re also placing a lot of trust into the hands of a brokerage firm, fiduciary, or financial advisor. The expectation is that they have your best interests in mind.
If a financial advisor makes a faulty recommendation intentionally, this may actually be considered fraud at worst, and at the very least, could be a breach of fiduciary duty.
When companies do not follow the standard set of rules and regulations laid out by FINRA, investors may suffer the consequences and this is where De Castroverde Law comes in to help you protect and recover your rightful financial assets.
FINRA, although authorized by Congress, is not a part of the United States government. Rather, it is a non-profit organization with the authority to oversee such financial activities as:
FINRA is a crucial part of keeping the marketplace fair and well-regulated, while providing basic protections for investors who are trusting the stock market with hard-earned savings in the hopes of a rewarding return on investment. Because FINRA is a non-profit, this also comes at no cost to the taxpayers, while maintaining a high ethical standard for businesses to follow.
As an investor, your stockbroker is required to ensure that you understand the exact risks you will be taking, as well as how the investment fits in with your portfolio and long-term financial goals overall. A brokerage firm, as well as financial advisors must take into consideration, all of the above factors when dispensing financial advice.
One of the core regulations of FINRA states that a stockbroker must have a reasonable basis for recommending that a financial transaction or investment strategy is sound and suitable, based on the best interests of the investor.