Securities Arbitration

Types of Claims

Negligence of Broker

Investors place a great deal of trust in their financial professionals and advisors.  Under states’ common laws, brokers, investment advisors, and the firms that they work for owe their clients a high degree of care to act as other reasonably careful financial professionals would in similar circumstances.  In other words, brokers, investment advisors, and firms have a duty to not act negligently toward their clients.  Judges and arbitrators have determined these common law duties are established by standards set by case law, federal and state securities laws, and the rules of securities regulators like FINRA.  Therefore, financial professionals’ conduct that violates securities laws and rules may also constitute negligent conduct that can be the basis of investors’ private claims to recover their losses.  This is true even if a government or regulatory body has already brought a civil, criminal, or regulatory action against a broker or firm. 

Examples of conduct that can form the basis of negligence claims include:

  • firms failing to adequately monitor or supervise their employees,
  • brokers failing to execute trade instructions or to exercise expiring options, or
  • brokers and investment advisors making unsuitable recommendations of investment products or strategies, such as by recommending an overconcentrated portfolio or risky investment.

When brokers, investment advisors, and firms act negligently and cause investors foreseeable harm, investors have a right to bring a negligence claim to recover their damages.  If you believe you have suffered losses due to such negligence conduct, contact Marquardt Law Office LLC for a free, confidential case evaluation.

Share Page