Bad Investment and Financial Advice

In the United States, over 25 million citizens are victims of fraudulent crimes each year. The 25 million citizens account for 11 percent of the adult population of the country. The majority of these fraudulent crimes involve security fraud or stock fraud, which is easily avoidable if the victim is knowledgeable of the securities fraud definition and if the victim knows how to effectively trade stocks. Fraud is defined as a deliberate deception carried out in order to secure an unfair or unlawful financial gain at the expense of another person. The Securities and Exchange Commission governs financial advisor fraud across the country and files civil broker fraud cases against individuals or corporations believed to be committing brokerage fraud.

Financial Advisors and Bad Investment Advice

A financial adviser is a person who lends investment advice and financial planning services to individuals and corporations. Financial advisers offer their clients help with maintaining a desired balance of investment income, capital gains, and an acceptable level of risk with the use of proper asset allocation. A financial adviser will use stocks, bonds, mutual funds, real estate investment trusts, options, futures, notes and insurance products to meet the needs of his or her clients. Financial advisers have a responsibility to their clients to provide them with the most accurate information about finances and healthy advice. If a financial adviser offers poor advice on purpose, to hurt their client, or provides insider information, they are subject to removal from their job and being charged with stockbroker misconduct by the Securities and Exchange Commission.

Inside Information Penalty

Insider trading of stocks, bonds, and other financial entities is illegal in the United States and if done comes with a hefty penalty that includes fines and prison terms. It is illegal for any financial adviser to inform his or her client about the stocks or bonds of a corporation using information that is considered non-public. If a financial adviser has been offering clients insider information, not only is the adviser subject to prosecution, but the client might also be subject to prosecution if it is found that he or she knew the information was non-public.

Legal Help

A practice that is becoming all too common these days is financial advisors providing their clients with poor advice purposely. This can be done by the adviser choosing stock options that are not in the best interest of the client and the adviser knows this going into the deal. When a financial adviser purposely provides his or her clients with poor advice regarding their finances this is considered fraud in the eyes of the Securities and Exchange Commission.

If you or a loved one feels that fraud has been committed against you by a financial advisor, contact a securities law attorney immediately for expert legal counsel regarding your case. A broker fraud attorney will be able to investigate the situation in depth according to the broker code of conduct, file a lawsuit against the broker accused of fraud on your behalf, and work towards finding other people harmed by the same adviser.