If I lost money on a stock recommended by my financial advisor, can I take any legal action?

Question: Last year, my financial advisor told me that a particular stock was very low risk.  It's been about a year and I lost close to 65% of my investment.  Is this a case of broker fraud and can I take legal action?

Response: A brokerage firm or individual broker/financial advisor may be held liable if that firm or broker misrepresents material facts or omits to disclose material facts to the investor regarding an investment, and that client subsequently loses money on that investment. In many cases, the misrepresentations or omissions may disguise the risk associated with a particular investment. The duty of the broker is to fairly disclose all the facts of the risk associated with a particular investment.

The U.S. Securities and Exchange Commission (commonly known as the SEC) is an independent agency of the United States government which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets. Through the SEC, you have the option to file a complaint if you think you were the victim of broker fraud.

Moving forward, please consult with a Securities Lawyer to determine the proper steps to take for your case.

Answered by Jason Tong

Additional Resources:

• SEC Center for Complaints
• Securities Lawyers

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