Trade Execution Negligence

Failure to execute trades, also known as a failure to follow directions, occurs when a broker does not execute a trade ordered by an investor.  Other cases can include when a broker or brokerage firm fails to obtain the best possible price during an authorized trade, fails to make the trade in a timely manner, or does not carry out a pre-specified action at the prices client’s believes they will be.  If a trader directs their broker to sell or buy a given security and it is not done, the broker will be found in violation of their duties to the investor. 

Broker Trading Instructions Negligence

This breach of duty also includes instances where an investor has a directed a broker to buy (open, purchase, or short order) or sell (closing orders) a specific security if the security reaches a given price and the broker does not do so.  In virtually all legally acceptable cases, a broker is under obligation to follow the directives of an investor, while making decisions strictly in the best financial interest of a client, such as obtaining a given price if reasonably possible.  Failing to do so can leave a broker liable for any potential losses, or damages, incurred as the direct result of the failure to execute trades.  Additionally, brokerage firms are required to disclose the amount of compensation their firm and individual brokers receive for a given transaction, which will be essential in establishing a fiscal motive for a failure or delay to trade.  There are also controls on the amount of markups brokers can retain.

Getting Legal Help

If you feel you have suffered financially due to the failure or delay to execute your investing directives by your broker, contact a securities fraud attorney today to discuss all of your legal options to recoup your losses.