- Jake Zamansky’s Blog for the Ordinary Investor As an attorney who represents individual investors from around the Country in claims against their stock brokers, I hear a wide variety of complaints about brokers fraud and misconduct. If you believe that your broker has abused or harmed you, you may want to consider whether your complaint falls within any of the following typical complaint categories. If you fall into one of these categories, you may have a meritorious complaint against your broker. Here are some guidelines to consider whether or not you have a case: 1- Unsuitable Investments If you tell your broker that you are a conservative investor with a low risk tolerance and you are put into, for example, risky high technology stocks. 2- Unauthorized Trades If you notice that buys and sells are occurring in your account without your prior permission or knowledge or any contact from your broker, these trades are unauthorized . 3- Risk Profile Change If you notice that the investment objective or risk profile ( aggressive moderate or conservative ) on your monthly account statements has changed, without your input, from, for example, moderate to aggressive . A red flag should go up if you receive documents from your broker which do not reflect your investment objective (aggressive, moderate, conservative). 4- Fraudulent Stock Research If you bought stocks relying on stock research which was determined by the SEC and New York Attorney General to be fraudulent (Infospace, ICGE, WorldCom, etc). 5- Churning If your broker is excessively trading or constantly turning over your account, for the purpose of generating sales commissions. 6- Fraudulent Statement of Risk If you have suffered substantial losses in your account and your broker told you that you had a low risk portfolio. 7- Over-concentration- If your account is over-concentrated in stocks and equity mutual funds which are primarily high technology or telecommunications, you have an over-concentrated portfolio. If your broker has not allocated your assets into different classes (stocks, bonds, cash) or diversified your stocks and equity mutual funds into different industry sectors . 8- Excessive Use of Margin If your broker buys stock with margin borrowings which you did not authorize. 9- Activity Letters If your brokerage firm sends you an activity letter advising you of large losses, turnover, high commissions, high margin levels, etc. in your account and this is not consistent with your instructions to the broker. 10- Mutual Fund Switching If your broker advises you to get out of one mutual fund or variable annuity and into another. Often brokers are pushing mutual funds which are proprietary and which may give the broker higher compensation and are not necessarily in the client s best interest. About The Author Jacob H. Zamansky specializes in securities arbitration and has over twenty-six years of litigation experience at private law firms and as a federal prosecutor (FTC). He has been recognized by the press as a “big-time” litigator and legal strategist. As a frequent commentator and “source” on CNBC, CNN, National Network News and FOX Business News, He has been quoted for publication in virtually every financial and legal publication including The Wall Street Journal, New York Times, Money Magazine, The New Yorker, Business Week and Fortune Magazine. jake@zamansky.com