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Advisor Misconduct

Financial Professional’s Misconduct

Many of our cases against financial professionals are filed in arbitration through FINRA Dispute Resolution, a forum in which we have considerable expertise. We work with FINRA arbitration claims every day. In fact, Bob Banks was part of the FINRA advisory committee that drafts the rules that govern FINRA arbitrations for 7 years. He chaired the Rules and Procedures Subcommittee. He helped write the arbitrator training materials for FINRA arbitrators, and he has been a FINRA arbitrator himself since 1990. Stockbroker negligence, breach of fiduciary duty, and fraud claims typically involve the following:


Financial advisors can only recommend investments that are “suitable” to the investor. They must ask about the investor’s financial background, experience, risk tolerance, and understand the investment they are recommending. Unsuitability exists when a broker recommends an investment that is not appropriate for the investor’s goals or risk tolerance.


Portfolios should have a mix of equities (stocks), fixed income (bonds, cash, treasury bills), and cash. Generally, the older you get, the greater the amount of cash and fixed income investments you should have. A financial advisor’s failure to properly allocate a portfolio can be negligence.

When a financial advisor or stockbroker fails to buy or sell an investment you have ordered, it is negligence.


Stockbroker firms are all required to closely supervise their financial advisors. If they fail to do so, and the broker makes a mistake of violates a law or policy, the brokerage firm can be negligent.


Asset classes in a portfolio should be diversified among sectors such as utilities, technology, and consumer good. Failure to diversify a portfolio can be negligent.


Financial advisors are required to fully understand the investment products they sell. If they do not appreciate the risks or limitations of an investment, there might be a right to recover.

False Statements

It is against the law for stockbrokers to make false statements to investors when advising them on whether to buy, sell, or hold an investment.


Stockbrokers are not allowed to leave out important information when recommending investments. Information which is “material” to making an informed decision must be disclosed before a stockbroker recommends a purchase or sale of an investment. Material omissions could include knowledge of unscrupulous managers, information about level or risk, liquidity or time horizons, or other facts which a reasonable investor would want to know. If it is later discovered that the stockbroker knew important facts that were never disclosed to the customer, a claim for fraud may be appropriate.


Financial Advisors are not allowed to use their customers’ accounts for their own personal use. Professionals who co-mingle their customers’ assets with their own and then lie about it to continue their behavior are committing fraud. Additionally, because firms are required to closely supervise their brokers, the broker’s firm is likely also responsible for the fraud the its broker committed.

If you have lost considerable assets because of your financial advisor’s negligence or misconduct, we may be able to help. Call us and speak with a lawyer who knows how to evaluate and win cases for investors. Or fill out our free confidential evaluation form. To learn more about our firm please click on any of the links below:

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I had no clue where to turn for help. Banks was tough but polite. I give the man my total respect and unlimited endorsement. To me, he achieved the impossible.


Thank you for all you did to represent us. For me you represent all that is good in the Law profession. You were honest, fair, hard working, and ethical. What more can you ask? Once again thank you for all you did.


Hope you have had a great year and we wish you and yours the best in the Holiday season. We fondly and gratefully remember all the efforts you made on behalf of N*** and I. Without a doubt our lives have been changed forever by meeting you.

A Banks Law Client, 8 years later

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