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3 Areas Of Investor Fraud That A Securities Law Attorney Can Help You With

17 April 2018

Judy Alexander

With all of the fraud that has occurred in the history of the stock market, you should know that there can be risky to your money that is not associated with market forces. There are many laws on the books at both the federal and state levels that regulate a range of the behavior allowed by securities firms. So whether you are a large or small investor, if an investment firm is managing your investment funds and you suspect some sort of fraud, a securities law attorney can help you in many ways. The following are a few of them.

1. They can help identify churning

Stockbrokers and other investment firms that make their money from commission on the buying or selling of securities sometimes will increase their commissions by excessive buying and selling. This is called churning and is illegal. Every time your money is used to buy or sell, it will cost you brokerage commissions. Because there is an incentive to buy and sell as much as possible, there are laws regulating how and when buying and selling can be done. If you feel you are a victim of churning, a securities lawyer can look at the specifics of your portfolio and apply the law to its history to determine if anything illegal is being done.

2. They can help identify a lack of investment diversity

Putting all of your eggs in one basket is risky. All responsible investment firms understand this, so they go out of their way to diversify your portfolio. They do this by purchasing some securities that move opposite of each other depending upon the state of the economy. In the stock market, there will be an attempt to buy stocks in various sectors, so your portfolio is not heavily tilted to the rise and fall of a particular area of the economy. When most of your money is placed in a single investment, your losses are not likely attributable to market forces.

3. They can help to identify a lack of supervision

In large investment firms, many investment brokers are assigned certain clients and are responsible for the divestment that is made. However, these brokers must be supervised. They are not allowed to do whatever they want. Neither is the investment firm allowed to take a hands-off approach only to place all of the blame on their employees for large losses. There are certain responsibilities that an investment firm has to make sure their brokers are doing the job properly.

Any time you believe there may be fraud involved in your securities investments, you should not hesitate to contact a securities law attorney. Not asking questions or not seeking advice when you are suspicious can be costly. For more information, check out a website like www.carterwestlaw.com.

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