Stockbroker Negligence

Stockbrokers and investment professionals have a duty, and with that duty comes a standard of care which is established by the federal securities laws, and self-regulatory rules as promulgated by the NASD and the NYSE. When a broker deviates from that standard of care, the customer has a claim for Stockbroker negligence, or stockbroker malpractice, which is a form of misconduct.

Moreover, there is a duty of loyalty and good faith in a traditional broker/customer relationship.

These duties include:

The duty to recommend a stock only after studying it sufficiently to become informed as to its nature, price and financial prognosis.
The duty to inform the customer of the risks involved in purchasing and selling particular securities.
The duty not to misrepresent or omit any fact material to the transaction.
The duty to study, analyze, and/or otherwise become informed as to the nature, price, and/or financial prognosis of the stocks purchased for Claimant's account;
The duty to inform Claimant, and indeed misrepresenting the risks involved in purchasing and/or selling speculative securities;
The duty to follow Claimant's expressed investment objectives and conservative investment strategy;
The duty not to engage in speculative trading or fail to properly diversify;
The duty not yo place putting their own financial interests above those of their clients.

When the stockbroker breaches these duties, the stockbroker and the employing securities brokerage firm with whom the stockbroker is associated is responsible for stockbroker negligence.