Securities Lawyers Offering Sophisticated Representation

FINRA Rule 2111 mandates that all member organizations must utilize due diligence to learn critical facts related to each customer and order. Broker-dealers must know their clients and their clients’ objectives in investing so that they do not make unsuitable investment recommendations to customers. The suitability of an investment depends on your risk tolerance, your sophistication as an investor, and your stated preferences and goals. For example, if you are an elderly investor trying to maintain your retirement funds, and your investment manager invests a huge proportion of those funds in volatile oil and gas stocks, a securities lawyer may help you bring an unsuitability claim. As an investor, you can make a stockbroker misconduct claim alleging unsuitability if an investment professional fails to follow FINRA Rule 2111.

Financial and securities brokerage firms have a legal duty to supervise their brokers. This is intended to prevent securities law violations. A brokerage firm needs to supervise a broker’s private securities transactions, securities recommendations to customers, and outside business activities. If an individual broker is negligent or acts unlawfully against a client’s interests, and the client suffers damages because of the wrongdoing, the firm may be held accountable for the investor’s losses under a theory of failure to supervise. Under the Securities Exchange Act of 1934, the SEC is authorized to initiate an enforcement action against a legal or compliance professional who does not provide adequate supervision of stockbroker-dealer personnel. This is a factual determination, but also a subjective determination.

Fraudulent or deceptive activities that involve stock or commodities markets are known as securities fraud. This can occur when investors are asked to part with their money based on false statements or when a public company makes false statements in financial reports. It may involve insider trading or front running. Federal and state laws prohibit securities fraud. Our securities attorneys can help you determine which laws may best support your claim.

Federal laws that define securities fraud include the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Advisers Act of 1940, the Investment Company Act of 1940, and the Trust Indenture Act of 1939. The federal offense of securities and commodities fraud covers any artifice or scheme to defraud someone or fraudulently obtain money in connection with securities, commodity options, and commodities, whenever an issuer of a security is required to register or file reports under the Securities Exchange Act of 1934. Under federal and state securities fraud laws, a state’s attorney general has the power to investigate any person, partnership, or corporation that employs a scheme or device to defraud or get money or property through misrepresentations or false pretenses or promises.

Account churning is an unlawful practice under federal laws and industry rules. Churning happens when a broker makes excessive trades on a client’s account in order to create a commission that will enrich them at the client’s expense. This is illegal under the Securities Exchange Act of 1934, which prohibits someone from using deceptive, manipulative, or other fraudulent contrivances or devices to complete securities transactions. Under 17 C.F.R. § 240.15c1-7, “manipulative, deceptive, or other fraudulent device[s] or contrivance[s]” include excessive transactions. Similarly, under FINRA Rule 2111, a broker needs to have a reasonable basis to think that a specific transaction is suitable for a client.

Employment litigation can arise from disputes related to discrimination, harassment, retaliation, and wages, among other issues. Federal and state laws govern these claims. For example, federal employment laws include Title VII of the Civil Rights Act, the Age Discrimination in Employment Act (ADEA), the Americans with Disabilities Act (ADA), and the Family and Medical Leave Act (FMLA). However, sometimes a state law may provide a greater range of protections than the corresponding federal law does. We often advocate for clients in front of federal and state agencies and in courts.

Commercial litigation includes many types of disputes that arise between businesses or between people involved in managing or operating a business. These can involve contract disputes, business torts, partnership or joint venture disputes, breach of fiduciary duty allegations, shareholder disputes, and intellectual property litigation. Commercial litigation can quickly become expensive if the case proceeds through the courts, and the stakes are often high. In some cases, a contract requires that the parties resolve a commercial dispute through arbitration. In other cases, the parties may voluntarily choose arbitration or mediation.

If you need a securities lawyer to pursue compensation from a broker or firm, or if you are involved in employment litigation or a commercial dispute, you should contact Varbero Casagrande. We represent clients nationwide from our offices in New York and Florida. Call our New York Office at: (646) 378-4400, or our Florida Office at: (954) 998-7910 or contact us online for a free consultation.