Customer Broker and Investment Fraud Claims to Heat Up

Bull BearAccording to Advisor Hub customer complaints and litigation against brokerages will be heating up with the market turmoil.  Most of the industry will likely conclude that coronavirus pandemic fears and oil wars between Russia and Saudi Arabia are the cause of the market drop and are totally out of anyone one person or companies control, however there can be broker misconduct involved in the level of losses because of things such as over-concentration and other individual account irregularities.

“The extent of losses may not be apparent to investors for three to six months, they said, and plaintiffs’ lawyers will then have to analyze portfolios and underlying claims of unsuitability to triage the ones most appropriate for litigation.”

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite are in bear market territory down 20% from their February highs.

The extraordinary volatility can cause over concentrated portfolio’s, especially accounts full of options and margined securities, to fall as much as double the indices, depending on the leverage in the account.  This may be unsuitable for certain investors.

If a broker or financial advisor did not properly diversify an account over various asset classes, there may be negligence or breach of fiduciary duty, which typically is never caught in good markets but when things go bad, it becomes apparent.

“Customer arbitration complaints filed with Finra plummeted by 55% from 5,246 in 2009 to 2,363 last year, a Finra spokeswoman said. The bull market that followed the 2008 financial crisis began in March 2009.

Miller Law – The Law Offices of Daniel J. Miller, LLC currently represents investors for claims of investment losses from over concentration, irregular options trading, margin and unsuitability claims, and other brokers and broker/dealers for investment losses and fraud.  If you or anyone you know have experienced investment losses from the actions above or other situations, please call 410-LAW-FIRM or fill out the contact us form for a no cost consultation and evaluation of your claim.

 

 

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