Breach of Fiduciary Duty

Stock Fraud Lawyers Protecting the Rights of Investors Nationwide

Federal securities laws impose duties on investment professionals regarding their relationships with clients. There can be slight differences in how these are defined when distinguishing among the wide assortment of professionals, such as investment advisers, brokers, and broker-dealers. However, the fact remains that every investment professional owes a significant duty to his or her clients. Based in New York, the knowledgeable stock fraud attorneys at Fitapelli Kurta represent clients nationwide who have been wronged because of broker fraud, negligence, or misrepresentation. Our lawyers are thoroughly acquainted with state and federal securities laws, including those related to the fiduciary duties owed to clients. We regularly arbitrate cases of misrepresentation before the Financial Industry Regulatory Authority (FINRA) and have recovered millions of dollars on behalf of investors.

File a Claim for Breach of Fiduciary Duty

A fiduciary is an individual who is in a position of utmost trust and confidence. Because of this authoritative role, there is a heightened duty placed on people who act as fiduciaries. This obligation is especially central in the investment industry, where most investors do not have the background to understand the complex nature of securities. Therefore, they must place their trust in a broker or adviser to make appropriate decisions and perform services on their behalf.

Investment professionals have a fiduciary relationship with their clients and are therefore required by law to put a client’s interest above their own in all matters when conducting business. If a conflict of interest happens to arise, an adviser must disclose the conflict to the investor and maintain impartiality.

While a broker is not always considered a fiduciary to a client, there are many laws and regulations that require a broker to always act in the best interest of the client. In doing so, the broker must put the investor’s concerns before his or her own financial interests. The Securities Exchange Commission (SEC), which is a government agency that regulates the securities industry, has listed some ways in which brokers must conduct business dealings. Those requirements include considering the suitability of a particular investment, conducting reasonable diligence in buying or selling securities, disclosing certain information to the client, and charging reasonable prices. When determining the appropriateness of an investment, for example, a broker should take into consideration a client’s age, financial circumstances, investment goals, and risk tolerance, among other factors.

A claim for a breach of fiduciary duty will often accompany another related claim, such as account churning, fraud, misrepresentation, or unauthorized trading. However, there are specific limits on the time that investors have to bring this type of claim, which may vary by state. It is vital to have a comprehensive understanding of the law in order to determine when the time limit begins to run.