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Securities Litigation & Arbitration

Securities Litigation & Arbitration Claims

Diane Nygaard represents investors in disputes with their stockbrokers or financial advisors when the following fraudulent activities have taken place:

1. Churning or Excessive Trading in their Accounts

Churning, or excessive trading, occurs when a stockbroker or financial advisor trades excessively in their customer’s account to increase their own commissions and fees.

2. Material Misrepresentations or Omissions

Stockbrokers and financial advisors must inform their customers of all material facts when recommending stocks, bonds, mutual funds, REITs, and variable insurance produced.

3. Breach of Fiduciary Duty

Many laws require financial advisors and stockbrokers to manage their clients’ money as a prudent person would, exercising diligence and the highest integrity and avoiding conflicts of interest and excessive fees.

4. Unsuitability

According to NYSE and FINRA rules  (the Financial Regulatory Authority regulating brokers and brokerage firms), each stockbroker must “know their customer,” and must recommend suitable investments, based on the client’s objectives, net worth, income, and risk tolerance.

5. Unauthorized Trading and Failure to Follow Instructions

A stockbroker may not trade in their customer’s account without the client’s permission. They must execute all orders promptly, and at fair prices. They can only liquidate stocks held on margin under the agreement terms.

6. Concentration

Stockbrokers cannot recommend that a client’s account be overly concentrated (have more than 10-20%) in one market sector, such as energy or precious metals.

7. Switching

Brokers cannot simply recommend a client change or switch from one similar investment to another (such as annuities or higher commission investments) to increase their commissions.

8. ERISA Violations

The Employee Retirement Security Act requires the people managing retirement accounts to act as fiduciaries, a high standard of care and there are stiff economic penalties for violating ERISA.

9. Low-Priced Securities

FINRA rules require a heightened suitability when a broker recommends a client buy speculative securities, trading at under $5 a share.

10. Annuities

Annuities are very high commission life insurance policies that prevent a person from freely accessing their money. Therefore, they are not suitable for IRA’s, most retired people, or anyone who may need their money to cover current living expenses or medical care.