Most, if not all, stockbrokers and financial advisors give the disclaimer that it is possible to lose the money you have invested. No one can control the stock market, so it may be hard to hold them accountable when things go bad and you have significant financial losses.

They may think this disclaimer will keep them off the hook if the market does not go the way they expected. At a time like this, you need the help of a trusted investment loss lawyer.  If it can be shown that the broker disobeyed a rule, or was negligent in some way, you may be able to recover your losses.

You will not be able to sue, or you won’t win a case against an advisor, who just gave you bad advice. So you cannot sue simply because you were given bad advice and lost money as a result. For a lawsuit to work, you must show that the advisor broke rules, or was negligent in some way with your finances. 

 The Financial Industry Regulatory Authority often hears cases and makes judgments regarding the behavior of financial advisors. There are a lot of rules that must be followed, and any violation that is discovered could end up before this authority. Often the advisor will accept the penalty “without admitting or denying the accusation.” This is like pleading no-contest in a criminal case.

The penalty is usually partly a fine and partly a suspension from being a financial advisor for a set amount of time. Financial advisors or stockbrokers work for a firm or a larger business, and they must also follow that firm’s rules in order to keep in good standing.

This may not seem very harsh to someone who has lost thousands of dollars or most of their life’s savings, but it can be the basis for a lawsuit that could be filed later with the help of a trusted investment loss lawyer. 

These cases are often held in private, and only some of the material ever becomes a public record. You will need a lawyer to find out whether any rules were broken, or whether your financial advisor was sanctioned for breaking rules or negligence.

Most large financial institutions that employ brokers or financial advisors are scrupulous in obeying rules and following set procedures. This protects them from lawsuits, and it protects the customer as well. When these institutions are following the law to the letter, you can be assured your money is in good hands. You probably won’t lose a lot of money unless the stock market takes a sudden turn downward, which is not controllable.

In some cases, however, brokers or advisors will take shortcuts that may seem harmless at the time. If one of those shortcuts causes you to lose money, you will have a solid lawsuit on your hands. 

Selling away

Brokers or advisors are only allowed to sell products, which is what the financial industry calls investments, that the firm offers to clients. Selling any other type of investment, legitimate or not, is illegal and would be considered negligence if it resulted in a loss to the customer.

In one such case this year, a broker was involved in transactions worth $1.6 million and did not notify her employer in writing. If she had notified her employer and gotten approval, there would not have been an issue. In this case, she was the chief operating officer of another small company that was handling the investment. She also coordinated sales and the signing of documents for clients. She did not receive any commission from the sales and none of the customers were customers of her firm. She also essentially denied being in compliance with the firm’s policies.

It is against the Financial Industry Regulatory Authority rules to “sell away,” or sell investments that are not offered by the firm they are representing. In fact, it is a violation to recommend, or even suggest, that a client invest in any business not offered by the firm. It does not matter if they receive no commission for any sales that follow.

The large financial firms do this so that they are only selling investments that have been vetted and rigorously investigated by the firm. 

There are many other rules that must be followed by investment brokers or financial advisors. This protects the firm and gives the customer some assurance that the investments are legitimate and sound. If you lose money due to an advisor’s negligence, you will need the help of a trusted investment loss lawyer. 

If you have lost a lot of money due to your investments, contact a lawyer familiar with securities cases. You may be able to win back some of your losses. Your initial consultation is free, and your lawyer can advise you from there. Lawyers are paid from the settlement they win for you.