Stockbrokers, financial advisors, mutual fund managers, hedge fund managers, investment advisors, 401(k) plan administrators, pension plan administrators, money managers, and other investment professionals must adhere to the fiduciary duties of loyalty, good faith, and fair dealing when managing and investing their clients’ money. Officers and directors of publicly-traded companies also must make decisions in the best interest of their companies and shareholders.
Securities claims—which may be litigated in an individual lawsuit, an arbitration proceeding, a class action, or a mass action—exist in many forms, including:
Securities fraud. Wrongful actions, misstatements, or omissions by officers and directors of a publicly held company that cause the value of the stock to decline.
Unsuitable investments. When stockbrokers, financial advisors, mutual fund and hedge fund managers, 401(k) plan administrators, pension plan administrators, money managers, and other investment professionals recommend or purchase in a client’s account securities that are contrary to the client’s goals, station in life, or level of stated risk.
Unauthorized trading. Unauthorized trading is a form of securities fraud that occurs when a stockbroker or other investment professional buys or sells a security in a client’s account without the client’s approval or authorization.
Churning. A form of securities fraud that occurs when a stockbroker or other investment professional engages in excessive trading in a client’s account for the purpose of generating sales commissions.
Shareholder derivative suits. A shareholder derivative lawsuit is filed by a shareholder against the company’s officers or directors to enforce the company’s rights when the officers or directors have acted unlawfully in such a way that damages the company. Shareholder derivative suits may involve claims for breach of fiduciary duty, excessive officer compensation, fraud, mismanagement, theft, proxy violations, stock option plan violations, related-party transactions, misappropriation of corporate opportunities or corporate assets, or corporate waste.
Broker/dealer disputes. Disputes between stockbrokers and their stock brokerage firm employers involving employment issues, compensation issues, bonuses, forgivable loans, contracts, misrepresentations, and other issues pertaining to their business and employment relationships.
Lee v. TriCentury Corporation; No. 1:08-cv-00719-RC (E.D. Tex.) (successfully defended bank against investors whose stock subscription funds were stolen by the bank’s lawyer) (favorable settlement for Firm’s client).
Hyman v. Metropolitan Park, Inc.; No. B-184614 (D. Ct. Jefferson County, Tex.) (successfully defended bank in a an investment fraud case) (favorable settlement for Firm’s client).
Castro v. PaineWebber, Inc.; No. 1:94-cv-00065-RAS (E.D. Tex.) (investor class action to recover losses pertaining to a limited partnership investment) (favorable settlement recovered for Firm’s client and investor class).
Multiple private investor/brokerage firm and broker/dealer arbitrations before the Financial Industry Regulatory Authority (FINRA).