For most people to achieve their goals and have financial freedom, saving money, and investing in the market is often a necessity. If you are going to invest and save for the future, it could make sense to work with a broker or financial advisor. In many cases, you will receive the guidance and support that you need to make sound financial and investing decisions.
While most brokers and financial advisors will have your interests in mind, mistakes do happen and some professionals could make unethical decisions on your behalf. If this occurs and you suffer a loss, you could consider suing the brokerage firm. There are several situations when suing a brokerage firm could make sense.
One situation when a lawsuit against a brokerage firm could be justified is there is gross negligence. There is always going to be risk in the market, no matter how your investments are allocated. However, a broker should be able to set your investments based on your risk tolerance, time until certain personal milestones, and other factors.
If it is clear that the broker has not done that and you incur a loss, the brokerage firm could be considered liable. They could also be considered negligent if they put your money into certain investments where they did not do the necessary due diligence.
Fraud or Misrepresentation
One of the most common situations, when a brokerage firm could be sued, is if there is fraud or misrepresentation. There are unfortunately many examples of brokerage fraud over the years. These can include selling a client's fake securities, promising returns on investment that are not achievable, misrepresenting their past successes with investment management or simply stealing money from your portfolio.
In any of these situations, it will be clear that fraud or misrepresentation has taken place, and filing a lawsuit could be the best way to be compensated for your losses.
Another situation when it might make sense to sue your brokerage firm is if there is a system failure that results in a loss. The stock market moves very quickly and investors depend on being able to trade whenever the market is open. While most of the firms will have the capability of handling your trades online or over the phone, there are examples in the past where customers have not been able to log onto their accounts or execute trades due to failures of the system.
If this has occurred with your brokerage firm and it prevented you from making trades, it could be detrimental to your finances. In these cases, filing a lawsuit to recoup the damages may be appropriate.
Hire an Attorney
If you believe that you have suffered an unnecessary loss due to the actions or inactions of your broker and want to file a lawsuit, it is imperative that you hire an attorney to represent you. A stock loss lawyer will be able to provide you with a variety of services that could help with this situation.
When you hire an attorney, the first thing they will do is review your situation and provide a consultation. The stock loss lawyer will review all of the agreements you have signed, local and state laws around indemnification, and your individual loss and situation to determine whether a lawsuit makes sense.
If they do agree with you and suggest filing, the lawyer can handle all of the necessary paperwork and negotiations with the other party. Ultimately, this will help to ensure that your rights are properly represented and that you receive the settlement or judgment that you are rightly entitled to.