Can I sue my broker for investment losses?

If your losses were caused by unsuitable investment recommendations, you may be able to recover funds through FINRA arbitration, not through a traditional lawsuit. A securities lawyer at Altamirano PLLC can help you evaluate your options and file a claim.

What is an unsuitable investment claim?

An unsuitable investment claim arises when a broker recommends a product or strategy that does not align with your financial goals, risk tolerance, or investment profile, in violation of FINRA’s suitability rule.

What damages can I recover for breach of fiduciary duty?

Depending on the facts of the case, recoverable damages in FINRA arbitration may include:

Compensatory damages – Also called actual damages, these are meant to make the investor whole for losses caused by the misconduct.
Net out-of-pocket losses – The difference between what you paid for an investment (including commissions), factoring in dividends or interest, and what you received when selling it, if sold.
Special or consequential damages – Losses tied to the wrongdoing, such as lost dividends, additional taxes, lost business funds, loss of financing, or excess commissions.
Benefit of the bargain damages – The difference between what an investment was worth as represented and what it was actually worth.
Well-managed account damages – The difference between your account’s performance and what a well-managed account with the same objectives would have earned.
Rescission – Returning the parties to the position they were in before the wrongful transaction.
Disgorgement – Forcing the broker or firm to give up profits or commissions earned through misconduct.
Other equitable remedies – In limited cases, specific performance or other non-monetary relief.

The damages available in your case will depend on the nature of the breach, the harm suffered, and the applicable law.

Is breach of fiduciary duty the same as fraud?

No. Fraud requires proof of intent to deceive or mislead. Breach of fiduciary duty can occur without intent when a broker or firm fails to act in the client’s best interests, violates loyalty obligations, or withholds material information needed for informed decisions.

Can I pursue a breach of fiduciary duty claim alongside unsuitability, negligence, or unauthorized trading?

Yes. Breach of fiduciary duty often appears alongside other claims, such as unsuitability, negligence, or unauthorized trading. It focuses on the broker’s failure to act in the client’s best interests, comply with their legal obligations, and uphold the trust and loyalty owed to the client.

When does a broker owe a fiduciary duty?

A fiduciary duty can arise in many circumstances, including when a broker has discretionary authority over an account, serves as an investment adviser, or has otherwise established a relationship of trust and confidence with the client. In a discretionary account, the broker can make trades without first obtaining the client’s approval, which carries heightened duties. Even in a non-discretionary account, brokers must make recommendations that are suitable for the client’s objectives, risk tolerance, and overall circumstances. Certain states, including California, Florida, and Missouri, have recognized that a fiduciary duty can arise in non-discretionary accounts when the broker’s role extends beyond executing trades and involves a relationship of trust and confidence.

What if the firm says it didn’t know?

Firms are obligated to supervise their brokers. If they failed to train, monitor, or intervene, they are responsible, regardless of whether they claim ignorance.

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New to FINRA arbitration? Have questions about the cases we take? We invite you to check out our Investor Guide to Securities Arbitration.

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Investor Claims

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