Understanding the Right of Investors to Sue When Stockbrokers Breach Their Fiduciary Duty

Attorneys providing tough advocacy when brokers fail to do their job

Many investors place their trust in brokers and brokerage firms because they do not have the financial expertise needed to understand the securities industry. A fiduciary duty is the highest standard of care.  When this duty exists, brokers must put the client’s interest ahead of their own interest. That means the broker cannot recommend products to the client if the broker knows the products are not in the best interest of the client. A fiduciary duty exists when the relationship with the client involves a special trust, confidence, and reliance on the fiduciary to exercise his or her expertise in acting on the client’s behalf. An actionable breach of fiduciary duty occurs:

  • If there is a duty to act professionally on behalf of the investor by the broker/advisor
  • If this duty is breached
  • If the breach causes damages that are tangible

The attorneys at The Frankowski Firm have a strong track record of helping investors throughout the country hold negligent stockbrokers, supervisors, and investment firms accountable. Lead attorney Richard Frankowski has 15 years of practical, financial, and legal experience in fighting for investors who have lost their savings. Many of his clients have obtained financial justice (and peace of mind) because of his firm’s ability to prove that brokers breached their fiduciary duty and caused their clients financial harm.

What are examples of brokerage fiduciary duty?

The Securities and Exchange Commission (SEC) holds that a fiduciary duty does exist between a brokerage firm and its clients. Fiduciary duties are also defined in the rules of independent self-regulatory organizations such as FINRA, and the laws of other agencies. Well-established fiduciary duties include:

  • Duty of Good Faith and Fair Dealing. Advisors and brokers must keep their clients’ best interests in mind at all times.
  • Duty of Disclosure. A broker must communicate details of investments, including risks, clearly and honestly from the beginning. Failing to do so, or omitting important information, could leave the stockbroker liable for damages.
  • Duty of Loyalty:  Brokers and firms are not allowed to use their positions of trust and confidence to further their own private interests.

If your advisor breached his or her fiduciary duties, it is time to make the call

The securities fraud attorneys at The Frankowski Firm know what stockbroker activity is designed to protect the investor and what actions do not. We can ferret out when stockbrokers misrepresent material facts and when they put the investor last instead of first. Our legal team works with financial experts to prove that the breach of fiduciary duty caused the investor actual and quantifiable harm. For help now, contact our office at 888-741-7503 or complete our contact form.