What You Can Do If You're the Victim of Elder Financial Fraud - Elder Financial Fraud Attorneys — Securities Arbitration Lawyers Blog

Breach of Fiduciary Duty

Investment losses that are the result of a breach of fiduciary duty can be a cause of action in an arbitration claim for damages. In many instances, the failure to disclose all relevant information concerning an investment recommendation may be the result of a conflict of interest between the financial advisor and his client. Financial advisors are required to avoid any conflicts of interest when providing investment advice for financial elder abuse.

Excessive Trading or Churning

Excessive trading occurs when a stockbroker engages in trading in excess of the investor’s goals in order to generate commissions. If the recommended investment strategy has, as its sole purpose, the enrichment of the brokerage firm and/or stockbroker by generating excessive commissions, fees, or costs, it may constitute a breach of fiduciary duty and a conflict of interest.

Failure to Supervise

Brokerage firms are responsible for the supervision of all the activities of their registered representatives, known as financial advisors or stockbrokers by the investing public. The Financial Regulatory Industry Authority (FINRA) establishes the required supervision of a registered representative as well as compliance with the securities industry standards of care for the handling of customer accounts.

Unsuitable Investment Advice

Brokerage firms and their representatives are required to only recommend suitable investments to their customers. Unsuitable advice is a violation of the “know-your-customer” FINRA Rule 2090 and “suitability” FINRA Rule 2111. The “know-your-customer” rule requires “reasonable due diligence” to determine all the “essential facts” concerning every customer of the brokerage firm. The “suitability” rule requires that brokerage firms and their representatives have a “reasonable basis” to believe that a recommended investment or strategy is suitable based on a customer’s financial situation and investment profile.

Broker Theft and Fraud

Simply put, the misappropriation or theft of client funds is prohibited. Examples of broker theft or fraud include borrowing money from a client without paying it back, forging letters of authorization to transfer funds from a customer’s account, and sending unsolicited account withdrawal checks to customers; these checks are claimed to be issued in error, and when the customer returns one, the broker deposits the money in a different account. In addition, any attempt by a brokerage firm to cover up theft or the receipt of unauthorized loans by one of their registered representatives makes the firm complicit in the fraud.

Trust and Estate Abuse

Financial advisors and brokers are prohibited from becoming entwined in a client’s estate or trust, whether this relationship involves being personally named as a beneficiary in a client’s will, using an elderly client’s assets for his or her own benefit (conversion), improperly being assigned or abusing durable power of attorney, or failing to allocate the funds as directed by a client’s instructions and wishes.

What You Can Do If You’re the Victim of Elder Financial Fraud – Elder Financial Fraud Attorneys

Scott L. Silver
Managing Partner

Breach of Fiduciary Duty

Excessive Trading or Churning

Failure to Supervise

Unsuitable Investment Advice

Broker Theft and Fraud

Trust and Estate Abuse

Breach of Fiduciary Duty

Excessive Trading or Churning

Failure to Supervise

Unsuitable Investment Advice

Broker Theft and Fraud

Trust and Estate Abuse

Scott L. Silver Managing Partner

Breach of Fiduciary Duty

Excessive Trading or Churning

Failure to Supervise

Unsuitable Investment Advice

Broker Theft and Fraud

Trust and Estate Abuse

Breach of Fiduciary Duty

Excessive Trading or Churning

Failure to Supervise

Unsuitable Investment Advice

Broker Theft and Fraud

Trust and Estate Abuse

Scott L. Silver
Managing Partner