Question

What can I do if I think my broker defrauded me in Georgia?

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Nicholas Berg - Securities Litigation - Super Lawyers

Answered by: Nicholas Berg

Located in New Orleans, LAReasonover & Berg, LLC

New Orleans, LA
Phone: 504-526-2921
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Answer

When you invest through a stockbroker, you expect them to put your best interests first. In fact, the law in most states (including Georgia) provides that stockbrokers owe fiduciary duties to ensure that they are acting in your financial best interests.

That’s why it can be surprising when you get hit with unexpected losses, unexplained fees, or unfamiliar investments. Sometimes investment losses can be the result of market fluctuations or honest mistakes, but if you suspect an ulterior motive, you may want to look closer at your broker’s dealings. If you spot signs of potential fraud, you may want to speak with an experienced securities attorney to investigate your broker’s conduct.

Signs of possible fraud

There are some common signs you can look for when deciding whether your broker is engaged in misconduct:

  • Churning, or high-volume trading to generate large commissions
  • Trading without your consent
  • Making trades without informing you of all risks
  • Making complex or risky investments that you do not understand
  • Sustaining large losses even though the market as a whole is performing well

If you suspect any of these, you may want to consider taking action and consulting with an attorney versed in securities laws and regulations and experienced with FINRA arbitration.

Addressing broker misconduct

If you do find signs of misconduct and contact a securities lawyer, they will start an investigation on your behalf. Many firms offer free initial consultations. You will need to provide the attorney with your account statements, as well as copies of your communication with the broker or brokerage firm. If you still have your initial account opening agreement, that may be helpful as well.

When you reach out to an attorney, typically they will start an investigation and advise you as to what steps to take. If the attorney identifies misconduct, you may need to take your broker to FINRA arbitration.

What happens now?

Arbitration is like court in that there will be a trial with opening statements, testimony from witnesses, cross-examination, and introduction of evidence. You can expect that the brokerage firm will be represented by an experienced securities lawyer. Unlike in Court, you have limited rights to discovery and the case will be presided over by a private arbitrator, appointed by FINRA, instead of a judge and jury. The arbitration process also generally moves faster than a court case.

Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.

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