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Suing An Illinois Broker For Fraud, Misconduct Or Breach Of Fiduciary Duty

Investing almost always comes with some risk, but often it’s a calculated risk. Most people invest their money after getting advice from a broker or other trusted professional. In an ideal world, you should be able to count on your broker to be honest, to give you solid advice and to look out for your best interests. Unfortunately, that’s not always the case.

If your broker has acted dishonestly or in their own best interest rather than yours, and those actions have cost you money, you may be able to recover what you lost by filing a claim against them. Unauthorized trading, churning, unsuitable investments, failure to supervise, negligence, failure to follow instructions, breach of fiduciary duty and investor fraud are just some of the ways brokers can take advantage of investors.

There are a few common situations that Illinois securities fraud attorneys see again and again. One situation is where a client specifies the level of risk they are comfortable with and the broker doesn’t follow those instructions. If your broker turns around and puts your money in riskier investments (“unsuitable” investments) than you wanted, and you lose money on those investments, you might be able to recover what you lost. These are called suitability cases.

Another situation is where a client is coerced into investing in a certain product because it brings the broker a higher commission. This can happen to anyone, but elder exploitation is a particular concern as these clients may be more vulnerable and their entire life savings may be at risk. The bottom line is that the advice given wasn’t in the client’s best interest but rather in the self-interest of the broker. Pushing a product purely for commission is a breach of fiduciary duty and if you lose money, you might be able to sue to get it back. Similarly, it’s illegal for a broker to trade excessively in order to boost fees and commission. This unauthorized trading is referred to as churning.

One other circumstance is when a broker promises a certain rate of return on a product. This may be fraudulent misrepresentation. If you rely on the promise and you lose money as a result, you may be able to win a claim against your broker and recover your damages.

Some cases warrant legal action and others may not. Many investments simply don’t pan out how you or your broker were expecting. The key is whether the broker committed fraud or breached what’s called their fiduciary duty. This is a duty they owe to their clients to act in the client’s best interests. Financial harm is the other key requirement. Investor recovery of losses requires proof of what was actually lost.

There are strict time limits when filing a case against a broker. In many cases, the deadline is two years from the date the fraud occurred, or two years from the date you knew or should have known about the fraud. However, additional factors can influence these deadlines, so always check with an Illinois attorney sooner rather than later. If you miss the deadline, you unfortunately miss your chance to recover what you lost.

Some cases against brokers are typical court cases. However, the majority of cases are resolved in arbitration because arbitration is specified in the agreement you signed when you hired your broker. Arbitrations end with final decisions much like those ordered by a judge. Because the decisions are binding, and there is a hearing (including witnesses and other evidence), it’s important to have an attorney make your case. The broker or brokerage firm will most certainly have legal representation and you will be at a disadvantage without an experienced Illinois securities fraud attorney on your side.

If you have questions about investment fraud, securities fraud, commodities fraud, futures account fraud or misrepresentation, or any related area of Illinois law, please don’t hesitate to ask. We are Illinois attorneys who will talk to you for free and do our best to answer your questions in a way that makes sense. The attorneys we recommend often work on a contingency basis which means that they don’t get paid unless they win.

If you have questions about the actions of your broker, there are ways to look into it confidentially. Talk to an attorney who can review your account statements, listen to your concerns and advise you on whether you have a claim against your broker. If you need help finding an experienced securities fraud attorney in Illinois, contact us online or give us a call at (312) 346-5320 or (800) 517-1614.