JOHN LAWRENCE ALLEN, ESQ

For Securities Fraud & Broker Fraud Call:

1.800.345.1888

Conflicts

  • John Lawrence Allen
Broker Fraud & Securities Fraud Attorneys Securities Fraud Lawyers Explain Conflict of Interest

Brokers and securities advisors have the legal duty to operate in good faith toward investors and to act in the investors’ best interests. However, many brokers and brokerage firms have revenue sharing agreements with specific mutual funds. This can create a conflict of interest, which often goes undisclosed.

When a broker has a revenue sharing agreement with a mutual fund, the broker may push or recommend that particular mutual...

  • John Lawrence Allen
Broker Fraud & Securities Fraud Attorneys Fiduciary Duty for Investor Claims

Breach of fiduciary duty is one of the most common investor claims against stockbrokers and brokerage firms. Regarding their brokers as experts in the area of investments and money management, many investors rely entirely on the advice and recommendations of their brokers. Recognizing the profound level of trust this places in the broker, the courts have determined that brokers hold particular legal duties toward their clients.

Brokers and brokerage firms always...

  • John Lawrence Allen
Broker Fraud & Securities Fraud Attorneys Unsuitability – “Know Your Customer” Rule

Under New York Stock Exchange Rule 405 (the “Know Your Customer” rule), a broker’s first duty to an investor is to gather all of the information necessary to ensure the recommendations made to the investor by the broker are suitable for the investor’s goals and circumstances.

This includes information about the investor’s: financial situation, investment goals and objectives, future needs and risk tolerance. The broker must also know the history...