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:
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.
The FINRA arbitration lawyers of De Castroverde Law Group can help represent your interests in the following types of investment loss cases:
Unfortunately, when companies do not follow the standard set of rules and regulations laid out by FINRA, investors may suffer the consequences and this is where De Castroverde Law comes in.
When you make an investment you’re also placing a lot of trust into the hands of a brokerage firm, fiduciary, or financial advisor. The expectation is that they have your best interests in mind.
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.
When companies do not follow the standard set of rules and regulations laid out by FINRA, investors may suffer the consequences and this is where De Castroverde Law comes in to help you protect and recover your rightful financial assets.
FINRA, although authorized by Congress, is not a part of the United States government. Rather, it is a non-profit organization with the authority to oversee such financial activities as:
FINRA is a crucial part of keeping the marketplace fair and well-regulated, while providing basic protections for investors who are trusting the stock market with hard-earned savings in the hopes of a rewarding return on investment. Because FINRA is a non-profit, this also comes at no cost to the taxpayers, while maintaining a high ethical standard for businesses to follow.
As an investor, your stockbroker is required to ensure that you understand the exact risks you will be taking, as well as how the investment fits in with your portfolio and long-term financial goals overall. A brokerage firm, as well as financial advisors must take into consideration, all of the above factors when dispensing financial advice.
One of the core regulations of FINRA states that a stockbroker must have a reasonable basis for recommending that a financial transaction or investment strategy is sound and suitable, based on the best interests of the investor.