Unsuitable Securities Lawsuits
Broker misconduct placing investors in unsuitable securities is one of the most common violations of
broker duties. The violation is frequently the result of neglect, although fraudulent intent also plays a
role in a minority of cases filed. The rationale is simple: 1) brokers are paid only on commissions
generated by actual trades, 2) time spent studying a client's best interest reduces trading time, and 3)
time spent analyzing risk and volatility of securities reduces trading time. Most often unsuitable
securities lawsuits are based upon violations of federal securities laws and state personal injury laws
which prove a broker's self interest in commissions result in neglect, laziness, or malaise carrying out
duties owed to clients. Proof of fraud or criminal intent requires satisfaction of a more stringent burden
of proof.
Unsuitable Securities Lawsuits - Personal Injury Law :
When evaluating any unsuitable securities claim, state personal injury law frequently governs when a cause action may be
pursued, the extent of civil responsibility, what recoveries are permitted, and how a cases
are presented at trial. Less often, federal statutes may preempt state laws and require lawsuits to be
filed the federal district court or one of a wide assortment of federal administrative law proceedings,
or occasionally allows plaintiffs to opt for either federal or state court systems. In all unsuitable
securities lawsuits,
settlement of civil liability claims before trial is strongly encouraged by judges to promote judicial economy.
For plaintiffs, settlement of lawsuits is permissive, and may be more advantageous than trial.
Settling lawsuits reduces risk, guarantees the recovery amount, should be contingent upon collection, and saves
time, attorney fees, and litigation costs. The greatest advantage of trial is economic - plaintiffs may
receive substantially larger awards in unsuitable securities lawsuits from court or jury verdicts than settlement offers.
Application of Law:
The evaluation of facts and applicable personal injury laws is a dynamic process, based upon circumstances
that are personal to each case. Statutes, cases, and rules of evidence and procedure all impact the ultimate
success or failure of each case. Lawyers who specialize in unsuitable securities lawsuits for plaintiffs interpret laws in
the light most favorable to their client when establishing liability, injuries, compensability, and settlement terms.
Similarly, defense lawyers and insurance adjusters are professionals who are equally talented in influencing
settlement of unsuitable securities claims far below the true trial value when claimants represents themselves.
See also: Unsuitable Securities Lawsuits - How to Find a Lawyer, Laws, & Lawyer Searches.
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