Franklin Stock Fraud Claim
Stock broker fraud in Tennessee
Stock brokers, or stockbrokers, are agents that charge a fee or commission to execute buy and sell orders on behalf of investors. They are either individuals or firms acting on behalf of individual investors.
A Nashville stockbroker serves his or her clients in several ways:
- Execution only—the broker can only carry out the client’s instructions to sell or buy stocks
- Advisory dealing—the broker advises the client on which shares to buy or sell, but the final decision rests with the clients
- Discretionary dealing—the broker learns what the investor’s objectives are and then makes all selling and buying decisions on his or her behalf
You may have a Nashville stock fraud claim when your stock broker commits any of these actions.
- Omission or misrepresentation is when a broker intentionally misleads his or her clients about a stock, often misrepresenting facts that hide the risk factors.
- Unsuitability is a situation where a broker recommends stocks that he or she knows to be outside the client’s risk tolerance. This allows the broker to push undesirable stocks onto an unsuitable client. This frequently results in losses greater than the client can bear.
- Overconcentration can be a type of stock broker fraud. This is when a broker fails to diversify his or her client’s portfolio when purchasing different types of stocks helps protect the client’s assets. Overconcentration fails to offer the protection of diversification.
- Churning is a type of stock fraud claim in Franklin. Stock brokers fraudulently create additional fees by creating more transactions. These transactions frequently consist of selling stocks with small gains in order to show profits and justify the increased transactions and fees.
These are just some examples of how a stock broker commits fraud. You trust your stock broker to be honest and have your best interests in mind when buying or selling stocks on your behalf. Whenever a stock broker commits fraud, it is a violation of the trust that he or she created with a client.
Craft & Sheppard, PLC supports you in your dealings with stock brokers and advise you on how to avoid stock broker fraud. Contact our law firm by email and discuss a stock fraud claim in Nashville.
