Our client is a senior citizen living in Florida who was seeking to secure his nest egg for the future by investing for long-term growth with moderate risk. A close personal friend referred our client to his broker, who at the time was a financial advisor at a leading investment firm.
Broker Borrows Client’s Funds
The broker used the relationship to exploit our client’s trust and obtain four loans from him in excess of $200,000. The loans were supposed to be paid back with interest. They weren’t. At one point his broker told him he would pay him back once his home was sold, but years have passed since the loans were given, and our client has not received his money back.
FINRA Arbitration To Recover Borrowed Funds
In 2019 our client hired Silver Law Group to recover the money he lent to his broker. We filed a FINRA arbitration claim against the firm the broker worked for because the firm is responsible for supervising its representatives.
Our statement of claim reads “Ultimately, a brokerage firm is responsible when a financial advisor improperly takes funds from a customer…(the firm) cannot turn on its own customers after its advisors take money from customers rather than suitably investing the funds.”
The statement of claim goes on to note that the brokerage firm breached their fiduciary duty to our client and violated industry rules, including the “know your customer” rule, FINRA’s customer suitability standard, and others.
The brokerage firm was negligent in its hiring, retention, and supervision of its employees and had a duty of care “based on representations and assurances that they would invest his money suitably given Claimant’s conservative investment objective and risk tolerance.”
Financial advisors should never ask a client to borrow money or invest directly in a stockbroker’s own holdings. Brokerage firms have a duty to supervise their employees and prevent exploitation of the elderly, improper business dealings, and to protect investors from predatory advisors.
Did Your Broker Borrow Money From You?
If your broker failed to pay back money borrowed from your brokerage account, you may be able to recover your losses.
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today and let us know how we can help.