1. Internet Stock Analyst Fraud - In the late nineties and Nasdaq boom drover the prices of technology stocks to unprecedented heights. Today, most of those technology stocks have vanished or lost nearly all of their value. Companies such as Merrill Lynch are currently being investigated by the New York Attorney General for for recommending stocks that the analyst's companies privately disparaged.
If you lost money in technology related stocks, you may be entitled to compensation depending on the company. Find out more.
2. Unsuitability - The broker must have reasonable grounds for believing each recommendation to a customer is suitable on the basis of the customer's other securities holdings and financial situation, among other factors. For example, a biotech company developing a new mesothelioma drug with no other major assets or a company with major asbestos liability would be unsuitable for most investors.
3. Churning - (excessive trading) - is when If a broker is buying and selling securities in your account to generate commissions that seem excessive, and he always has some reason why you should take quick profits, there is a strong possibility that your account is being churned.
4. Unauthorized Trades -Brokers must have expressed and detailed permission of the customer unless the broker and the broker's firm have been granted written discretionary authority by the customer.
5. Failure to execute order (including online trading errors) - Brokers can't refuse your order and are responsible for executing orders in a timely fashion.
6. High Pressure Selling / Misinformation - some brokers use illegal techniques to sell their "house stocks".
7. Over Concentration - Brokers must assure that the portfolios of their clients are balanced with a diversity of investments.
8. Illegal Accounts - A broker cannot place a client's money into his own personal account or set up false accounts.
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