Tennessee Broker Negligence Lawyer Protecting Investors
Nashville investors have legal support after losses
The roles of investment brokers are seemingly clear: recommend suitable investments and help them to increase their wealth. When either of these mandates is twisted by incompetence or maliciousness, it isn’t simply a sad moral warning, but is instead a situation that can have legal ramifications. Our Tennessee broker negligence lawyer are here to guide you through the process of deciding if you have a case and pursuing justice.
The Frankowski Firm is here to assist investors that have been duped, bilked or simply misled by unscrupulous brokers. Our attorneys have over 15 years of experience helping clients achieve justice.
Legally, what is broker fraud and negligence?
While there are plenty of ways in which an investment professional can abuse the trust of her or client, there is also a comprehensive list of specifically criminal charges. These range from negligence to fraudulent schemes affecting individuals or groups of investors.
In Tennessee, broker fraud and negligence crimes include the following categorizations:
- Account churning. A substantial portion of an investment professional’s income channel is via the fees that he or she earns for each client’s transaction. One way to artificially inflate his or her income is to perform redundant, unauthorized or otherwise unnecessary transactions.
- Breach of fiduciary duty. The fiduciary duty of registered investment advisor is to offer the highest standard of care, putting the needs, desires, goals and preferences of the client as the highest priority. Any time one of these criteria is violated, the advisor is in violation or breaching his or her fiduciary duty.
- Failure to diversify. In the financial world, diversity refers to the policy of spreading a client’s investments across various types of funds or industries in order to provide a more broad and stable financial base. When a broker either doesn’t inform the investor of this need or fails to carry out authorized trades to fulfill this need, the investment professional is liable.
- Failure to supervise. One bad broker can do more than harm his or her own clients. That so-called “bad apple” also hurts the entire brokerage and financial industry’s reputations. Thus, there is a mandate that investment firms closely monitor their employees for any sign of malfeasance. Legally, that means that the firm is also legally accountable for the actions of its employees.
- Ponzi or pyramid schemes. Many novice investors think these types of fraud are no longer practiced and are merely the plots of exciting Hollywood movies. The truth is that there are still serious risks to be seen, most recently in Bitcoin investing, IP phone services and even in the mundane investment office. Every investor should be aware of the warning signs of an illegal Ponzi scheme, so he or she does not fall prey.
- Selling away. Brokers are limited to recommending investments that are approved by the broker’s firm. When the broker sells outside investments to client, this is called “selling away” and may be the basis for liability should losses on the investment occur.
- Suitability. Another duty that a broker owes to every client is to make sound suggestions based on that client’s particular tolerance for risk and preferred duration of investment. When these individualized needs are dismissed or ignored and clients lose money, the investment professional may be held liable.
Experienced Tennessee broker fraud and negligence attorneys fight for victims
Earning and losing money are the realities of investing. No investor can expect to earn money on every investment, 100% of the time. However, not every loss is simply a vagary of the market. Sometimes, those losses are due to fraud or negligence on the part of the broker, and are thus prosecutable. If you or someone you know in or around Nashville has lost money after taking the advice of an exploitative investment broker, call the Tennessee broker fraud and negligence lawyers at The Frankowski Firm at 888.741.7503 or contact us to discuss your legal options.