Americans are heavily invested in the stock markets. In fact, 55 percent of Americans have stocks that are owned by individuals or mutual funds as well as equities within their 401(k)s and IRA’s that account for about 300 million people! It’s not surprising considering it’s a method of making your money grow quicker than other forms. But the controversy around this practice has been triggered by fraud in the form of theft, corruption, and improper activities by those who work for brokerages.
A rising trend
Financial professionals were shocked to discover that prominent brokers were found guilty of bilking their customers. What is your investment’s safety? You must be aware of the different obligations that the stockbroker owes his customers to be able to gauge how much protection an investor is against fraud.
We were all surprised to witness prominent figures from the industry being escorted through jail after being accused of bribery as well as fraud. But, justice seems to prevail until the day arrives.
The world of finance is complex , and there are many interactions between individuals. One example of such a relationship is “fiduciary responsibility” (or “fiducia legal”) that is if someone manages money for someone else as their agent or guardian. But this situation is not backed by the law.
Registered representatives are often tied to financial advisers who can assist with the more difficult legal issues or crimes. They are bound by fiduciary obligations, that require them to plan your financial future, not simply trading securities . However, this doesn’t mean you shouldn’t beware! Stockbrokers can still be subject to civil or criminal charges for misconduct. However, the way these cases are handled differs from when dealing with brokerages that don’t have any protections for customers’ rights as proportional thirds.
What exactly is Fraud?
The term broker fraud refers to brokers who lie to or deceive their clients, or steal client assets, and engage in other violations. Churning refers to excessive trading which is only done so that brokers make more money.
If a person loses their retirement savings or retirement funds because of negligence, incompetence or fraud then they can make a claim for the recovery of the funds. Since investors must agree to arbitration clauses that prevent them from taking cases before a courtroom, the majority of instances of loss of funds are settled through having lawyers dispute what is left, rather than having lengthy hearings in front of everyone who can hear the yells.
For more information, click securities fraud attorneys