The Stoltmann Law Offices exclusively represents investors from across the country in securities litigation and FINRA arbitration actions. Our attorneys have handled approximately one thousand investment securities fraud cases and related court cases. Our Chicago based law firm exclusively focuses on FINRA securities arbitration claims and individual lawsuits against financial institutions, financial advisors, mutual fund firms and insurance companies throughout the United States. Stoltmann Law Offices securities arbitration lawsuits concentrate on brokerage firms, mutual fund companies and registered investment advisors engaging in unlawful investment conduct.
At Stoltmann Law Offices we offer hands-on customized, aggressive legal advice. This personal approach means that our clients will always have an attorney available to them, prosecuting their claim. With our law firm, you will be in frequent contact with an attorney who understands the nuances of your individual case.
Under an investor’s state securities act, enforceable legal actions can be brought against financial institutions for failure to diversify a portfolio, fraud, churning, unauthorized trading, misrepresentations and omissions, selling away, breach of fiduciary duty, negligence, financial exploitation of the elderly and other related actions. Investment losses often have a devastating impact on investors whose trusted financial advisor, stockbroker, insurance agent or financial professional failed to comply with their fiduciary duties and obligations.
Unsuitable Investment Recommendations: Brokerage firms, brokers and registered investment advisors have a duty to make appropriate and suitable investment recommendations. Each state defines what is a suitable recommendation differently. Classic unsuitable recommendations?
1) The sale of speculative, high risk stocks to a retired investor or a client with limited financial resources;
2) Concentrating an investor’s portfolio in one or a few securities or types of securities;
3) Failing to asset allocate a client’s portfolio;
4) Utilization of margin for a client with limited financial resources.
Failure to Diversify: Brokers are obligated to diversify and asset allocate a clients portfolio. Often brokers will concentrate client port in securities that pay them more in compensation Placing too much of a clients port in equities or high risk investments can make the firm liable to an investor for any losses that occur.
Selling Away and Ponzi Schemes: Unfortunately, brokers and financial advisors have engaged in hundreds of ponzi and selling away schemes at virtually every major and regional brokerage firm. We have written extensively on these topics. For more information on these sorts of claims, please visit our related website at www.ponzirecoverycenter.com
Churning or Excessive Trading: Churning and excessive trading is prohibited under most state securities act. While there are differences between churning and excessive trading, the hallmark of both is trading designed to generate fees and commissions for the broker and brokerage firm. We have written extensively on churning and excessive trading claims. For more information visit our related website at www.churningfraud.com
Failure to Supervise: The failing to supervise a financial advisor is extreme common. Unfortunately, supervision is not a money making activity for brokerage firms. Therefore, while brokerage firms give lip service to the importance of supervision, usually there is little to no real supervision of financial advisors. For example, reasonable supervision requires a branch office manager to close an account down if the broker is recommending trading that is so aggressive and speculative, it all but guarantees the client’s account loses money. Since the firm and the branch office manager earn part of the churned fees, there is little incentive for a supervisor to close an account down. Typical supervision at brokerage firms means the firm will send a few generic happiness letters to try to cover the firm in case the client files an arbitration claim.
Breach of Fiduciary Duty: In some states, every broker at every brokerage firm owes a legal fiduciary duty to a client (California). In other states, courts have concluded if a client reposes “trust and confidence” in the broker, then he is a fiduciary (Illinois). Each state has different laws on whether a broker is a fiduciary or not. As a fiduciary, brokers and investment advisors have several obligations. First, he must asset allocate and diversify a client’s accounts. Second, he must manage accounts in a manner directly in line with the needs and objectives of the customer. Third, the fiduciary must keep abreast of all changes in the market, which could affect his customer’s interest, and they must act responsively and sensibly to protect those interests. There are many other duties of a fiduciary but these are the most common.
Misrepresentations and Omissions: All material risks must be disclosed to clients and a broker cant misrepresent material risks to clients. Classic misrepresentations and omissions in securities fraud suits include the following: Touting the stock of a company as a “guaranteed investment” or “secured” when in fact it isn’t; Failing to disclose the degree of risk associated with an investment; and making overly positive or optimistic statements about an investment.
Unfortunately the overwhelming majority of all investment fraud abuses are never reported. The number of FINRA securities arbitration cases that are actually filed against stock brokers, insurance agents and investment advisers is a very small percentage of the actual actionable claims. Often, investors feel embarrassed by their supposed gullibility or degree of trust placed in their financial advisor. Investors often assume they are simply the victim of the financial markets and there is no recourse against fraudulent advisor mismanagement. However, if an investor is the victim of fraud, they do have legal options and the ability to recover some, or all, of those investment losses.
Brokerage firms have a duty to reasonably supervise the activities of their financial advisors. Failure to do so can make the brokerage firm liable for the investment losses sustained. A financial advisor who failed to disclose the risks associated with an investment product, churned client accounts, made unsuitable investment recommendations or converted client funds may all be cause for actionable claims. Unscrupulous activity by stock brokers and advisors entitles the investor to possibly recover his or her losses, attorney fees, statutory interest and costs through FINRA arbitration or lawsuits.
Call us for a no cost, no fee review of your potential case by a team of experienced investment fraud lawyers. We typically work on a contingency fee basis. This means if we do not win you will not pay any attorney fees.