This post is written on behalf of Girard Bengali, APC.


On behalf of Girard Bengali, APC posted in blog on Wednesday, June 6, 2018.

The value of investments may rise and fall in the market. Not all losses in the stock market or other forms of investment mean that something nefarious is going on. However, stock broker fraud and brokerage firm misconduct can lead to devastating losses for investors. In many ways, proving misconduct for an individual investor may seem daunting. For instance, an investment may be suitable for one investor who has a higher tolerance for investment risk. That same investment may be highly inappropriate for someone else.

While it may seem difficult for individual investors to determine whether losses tied to an investment show that misconduct may be involved in the transaction, there are some common red flags investors may look for to determine whether it is time to speak with an aggressive securities law attorney.

A High Percentage Of “Alternative” Forms Of Investment

Many types of investments carry higher risks of loss. Alternative investments often carry higher risks for loss such as, private placements, real estate investment trusts that are not traded on an exchange, or other interests in businesses that may not be as easy to trade as shares of publicly traded stock. If your financial advisor or investment representative is pushing you into a high percentage of alternative investments, you may want to reconsider your options. Moreover, if you have lost significant resources due to a high percentage of these investments, it may be time to obtain legal assistance.

Your Broker Does Not Discuss Investment Risks With You

Determining your goals and risk tolerance are important features of your relationship with your broker. Unsuitable investments are a common problem in cases involving broker misconduct. If your advisor skims past the issue of investment risk and encourages you to make a purchase, it may be a signal of misconduct.

Unauthorized Transactions Or Fees Appear In Your Account Statements

Your broker should not make traded on your behalf without your express authorization. Excessive fees, debits and credits on an account statement, as well as records of transactions you were never aware of could be signals of fraud.

Constant Calls To Revise Your Portfolio

Unscrupulous brokers may try to generate excessive fees and commission through the process of churning an account. Some sophisticated day traders increase their wealth playing the market and using techniques to find value in trading stocks as their market value fluctuates during the day. However, for most investors, holding stocks for the longer term is the better practice. Constant or frequent trades to generate commissions for the broker, rather than increase investor wealth, can be a red flag for investment industry misconduct.

Seeking Help When Needed

While loss of money in an investment alone may not necessarily signal misconduct, excessive losses — especially in a strong market — can be a signal that misconduct is involved. If you suspect your losses are not justified by market risks that suit your tolerance, discussing your concerns with an experienced broker fraud lawyer may be your best course of action.

related Posts


On behalf of Girard Bengali, APC posted in blog on Wednesday, December 5, 2018. Ex-State Assemblyman Terrence Patrick Goggin served as CEO of Metropolitan Coffee & Concessions (MC2), which ran a chain of Peet’s Coffee & Tea shops located in BART stations in the bay area. Now he faces a grand jury indictment for fraud charges, including wire fraud

Read More »


On behalf of Girard Bengali, APC posted in blog on Tuesday, October 23, 2018. Elder financial abuse is a serious problem. When organizations target the elderly they are taking advantage of people who are more susceptible to scams. It’s an issue that affects everyone. Whether you are a target yourself, have elderly family members or may be aging into

Read More »


On behalf of Girard Bengali, APC posted in blog on Thursday, August 2, 2018. A former CFO for Snow Park Capital Partners accused the CEO of sexual harassment, but withdrew her suit after the hedge fund countersued alleging she had embezzled money. Kate Merli, former CFO, had accused CEO Jeffrey Pierce of multiple instances of sexual harassment. Hedge fund

Read More »


On behalf of Girard Bengali, APC posted in blog on Monday, May 21, 2018. Financial exploitation of the elderly is a common – and well-known – problem. The Securities Industry and Financial Markets Association estimates that one out of five individuals over the age of 65 has suffered financial exploitation. Only a small percentage of the cases are ever reported. Some

Read More »
Scroll to Top