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The ABC's of Securities Litigation Claims
Failure to Supervise
When management at a brokerage firms fails to properly monitor trading activity by its brokers and investor losses occur because of wrongdoing, investors may be able to assert a failure to supervise claim against the firm.
Ineptitude Or Malpractice
In general, malpractice refers to a situation in which a professional harms a victim by providing substandard services -- meaning that another equally trained professional might have avoided the harm caused to the victim. Brokerage malpractice refers to cases in which stockbrokers or analysts issue unfounded, incorrect, deceptive, or otherwise misleading advice to their clients. As a result, the client may make poor investment choices and lose significant amounts of money. A securities firm that employs a stockbroker guilty of malpractice may also have legal responsibility for investor losses.
Insider Information
Insider trading occurs when a person with inside knowledge about a company's dealings uses that information to trade stocks. People who may have access to inside information include brokers, stock analysts, investment bankers, and company employees. It is illegal for anyone with inside information to buy or sell stocks based on their unique perspective or special knowledge.
Market Manipulation
Market manipulation occurs when a company, broker, or individual investor undertakes activity in order to create a false impression regarding a security, its trading activity or price movement, or other, related market information.
Misrepresentation
All members of the securities industry face liability for giving out wrong information or concealing true information. Misrepresentations may exists in a company's public filings and papers or when a broker or brokerage firm publicly supporting a stock while privately admitting that it is a risk or a bad buy.
Omission of Facts
This form of securities fraud occurs when a company or broker intentionally misleads investors about material facts regarding a security by failing to disclose important information regarding the offering.
FAQs
- The investment newsletters seem so thorough--what should I watch out for?
- How do I protect myself from falling into a trading trap in which the website operators promise big returns?
- Commentators on investment bulletin boards sound so knowledgeable--should I heed their advice?
The Online Q & A Forum For Securities & Commodities Disputes
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