Investor Representation in Stockbroker and Investment Fraud Claims
Richard Lantinberg is one of the only attorney's in Jacksonville representing individual investors in disputes with Wall Street firms, their stockbrokers, advisers, annuity and insurance salespersons, and promoters of all types of private investments.
Mr. Lantinberg has been representing individuals that have been victimized by their stockbrokers, investment advisers, insurance and annuity salespersons, investment promoters, and other financial professionals for over 20 years.
He has experience and knowledge in a wide range of investment fraud cases, including basic suitability cases, stockbroker fraud, theft cases, selling away cases, illegal borrowing/lending cases, margin cases, option cases, churning cases, cases involving unauthorized trading, and cases involving variable annuities and insurance products.
Your case might involve margin, stock and index options, promissory notes, REITS, private placements, PONZI scheme investments, private investments, and essentially any situation where an investor has made an investment with a third party. Many cases against brokerage firms and investment advisory firms also involve some level of a failure to supervise, where the firm and/or its owners are held legally and financially responsible for failing to detect and prevent the underlying wrongdoing.
Richard Lantinberg is experienced in representing investors in a wide variety of claims that can be brought against a broker or investment advisor. We represent clients in Florida and in all states in FINRA arbitrations.
Breach of Fiduciary Duty
Stock brokers owe their client's very high duties of care and trust. Most if not all investors place complete trust in their brokers and/or investment advisors. A fiduciary duty is the highest duty under the law.
Investment advisors are fiduciaries pursuant to a federal law – the Investment Advisors Act of 1940. FINRA registered stockbrokers can become a fiduciary to a client by undertaking certain duties for the client, and when the relationship involves a special trust, confidence, and reliance on the stockbroker to exercise his or her expertise in acting on the client's behalf. A fiduciary duty is the highest duty under the law, and when a financial professional acts as a fiduciary, they owe the client a wide range of duties, these include:
- the duty of loyalty and care;
- the duty of full disclosure;
- the duty to refrain from self-dealing; and
- the duty to always put the client's interests ahead of their own.
When a stockbroker or adviser serves as a fiduciary, and fails to adhere to these high and exacting standards, the fiduciary duties can be breached, thus entitling the client to recover their damages.
Richard Lantinberg knows when a stockbroker or adviser has breached their fiduciary duty, and we know how to prove the breach of fiduciary duty caused the investor recoverable damages.
We call this the know your customer rule.
Stockbrokers are required to recommend ONLY suitable investments to their clients. The first task of a broker is to determine the investor's investment objectives, risk tolerances, and other financial considerations. Before every recommending an investment, the broker must first fully understand the risk and circumstances associated with the investment to be recommended. This is called reasonable basis suitability.
There must be a reasonable basis for the broker to recommend to a qualified investor to invest in the stated investment. Not all investments are right for all customers. If your broker told you “I bought this too…” that's a red flag.
Next, a stockbroker must determine the client specific suitability, and learn all of the essential facts about the client before making any recommendation to invest – either generally or specifically. These suitability factors and essential facts include the investor's age, investment objectives, risk tolerance, level of sophistication, income, net worth, tax status, time horizon, liquidity, income, and liquidity needs. When a stockbroker fails to match the investment to the specific and personal needs and risk tolerance of the investor, the stockbroker has breached the duty to only recommend suitable investments, and the client is entitled to recover damages sustained from the unsuitable recommendation. Suitability claims frequently involve the following:
- The broker fails to understand the underlying investment and its risks
- The broker fails to accurately explain the risks in any investment so that the client can understand the risks, given their level of experience and sophistication
- The broker recommends that the client buy, sell, exchange, or hold the investment when the broker has failed to match the investment to the client's needs.
Richard Lantinberg understands what brokers and investment advisors are supposed to do when recommending an investment or strategy to a client, and he knows when they fail to comply with the suitability duty, and how to recover damages from the breach of those duties.