Negligence occurs when a brokerage firm or financial advisor fails to adhere in a reasonable manner to the rules and regulations laid out by FINRA. Negligence may not be intentional; in fact, it is often unintentional due to a lack of training or supervision by their representing brokerage firm, but nonetheless the consequences may be severe.

Examples of negligence may include:

  1. Omission of necessary facts;
  2. Offering misleading information when it comes to insider trading or investing;
  3. Failure to act in the best interests of the investor;
  4. Not disclosing the potential risks of the financial recommendation;
  5. Not taking the client’s financial goals into consideration;
  6. A lack of proper training for financial advisors by the brokerage firm;
  7. A lack of adequate supervision of financial advisors by the brokerage firm.

An act of negligence does not need to be intentional for you to have a viable arbitration case. In many cases, the investor is relying heavily on the brokerage firm or financial advisor to provide the most important information, such as the risks involved in their recommendation, as well as how the investment may impact your overall financial goals. If the broker provides inaccurate or misleading information, or doesn’t disclose the potential risks, the brokerage firm or advisor may be held accountable for their negligence in an arbitration case. It may also be considered a negligent act if a broker recommends a financial product that is inappropriate for the needs of the client and results in a financial loss.

In some cases, it may be a lack of adequate training or careful supervision of the financial advisor by the brokerage firm that they represent, but in these cases, an arbitration case of negligence may be filed against the brokerage firm. A brokerage firm is required to ensure that all financial advisors have the experience and knowledge to make the best recommendations based on the interests of their clients, and a failure to do so is often directly related to the brokerage firm’s handling, supervision and monitoring of their financial advisors.

If a financial advisor makes a faulty recommendation intentionally, this may actually be considered fraud at worst, and at the very least, could be a breach of fiduciary duty. If the resulting financial losses were based on risks that could have, or should have been predicted by the financial advisor, this is a clear case of negligence and viable for an arbitration case.

Experienced Investment Loss Arbitration Attorneys

Any arbitration case based on the rules and regulations of FINRA should only be handled by the most experienced arbitration attorneys. When it comes to investment loss and mishandling of funds under FINRA, De Castroverde Law firm has a team of experienced arbitration lawyers ready to take your case and help you recover your financial losses. We understand how frustrating and complicated the stock market is, and losing vital resources from your business or personal finances can be a devastating blow.

If you believe that you have experienced negligence at the hands of a brokerage firm or financial advisor, contact De Castroverde to start your arbitration case today and recover the assets you’ve worked hard to invest.