Broker fraud charges arise when one of the following is believed to be the case:
An investment advisor or broker provided biased, contradictory, or unfounded advice
A perceived conflict of interest exists
When an advisor is said to have pressured his or her client to stick with a “risky” investment
SEC regulations are strict and potential punishments harsh: An advisor must present accurate and complete information to the investor, and he is required to look out for his client's best interest as well as receive that investor's permission before purchasing bonds, mutual funds, or stocks. If securities are to be purchased on credit, these credit terms must be explained to the investor beforehand.
However, even when these steps are taken losses remain common; we may "play" the stock market, but it is not a game. Sometimes losses are bad luck, and other times an honest mistake. Fortunately, the Private Securities Litigation Reform Act of 1995 sought to limit frivolous litigation. Under Tellabs Inc. v. Makor Issues and Rights, Ltd., the plaintiff in an Investment Fraud case must establish that the intent to defraud was more than just a possibility; the intent must be convincing and at least as compelling as any opposing inference of nonfraudulent intent.
If you are being faced with investment or brokerage fraud charges, the biggest mistake you can make is not securing a defense team right away. For a free initial consultation, Contact one of the Blanch Law Firm's Securities Fraud Attorneys by calling 888-984-5579 .