The experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo are ready to assist any Englewood investors who have incurred losses in their brokerage and/or retirement accounts. The securities litigation attorneys at Lubiner, Schmidt & Palumbo have over 30 years experience handling securities litigation and regulatory matters. Among the attorneys at the firm are a former New York City prosecutor, a former in house attorney at a major brokerage firm and a former stockbroker. The securities group at the firm has appeared in courts and arbitrations across the country, including New Jersey, New York and Florida. The experienced securities fraud attorneys at the firm have handled hundreds of securities arbitration cases conducted by the Financial Industry Regulatory Authority (“FINRA”). Over the course of 30 plus years of handling securities matters, the firm’s attorneys have developed a deep understanding of how brokerage firms operate and what their best practices are – or should be. Englewood investors who have suffered financial losses at the hands of dishonest or incompetent brokers can rely upon the experienced securities litigation attorneys at Lubiner, Schmidt & Palumbo to recover any losses they incurred.
Securities fraud is a broad term that includes many different improper activities of brokerage firms and their employees. For instance, brokers are required to discuss proposed investments and have the consent of a client before entering an order in a client’s account. Failure to get that prior consent can be deemed unauthorized trading. Any losses the client suffers from an unauthorized trade are recoverable.
Securities industry rules require that brokers “know their customer.” They must learn the financial background of a customer, the customer’s investment experience, risk tolerance and investment objectives before making an investment recommendation. If a broker makes a recommendation to the client without a complete understanding of the client’s financial background and investment experience, that may lead to an unsuitable trade. Any losses the customer incurs as a result of that unsuitable trade is recoverable.
Englewood investors should be wary of the many complex investment products that are available in the market and sold to unsuspecting customers. Exchange traded funds (“ETFs”) are popular investment vehicles that are packaged similar to mutual funds. They are comprised of an underlying “basket” of securities such as bonds, stocks, etc., and focused on a specific sector of the economy. They are priced daily and trade like a stock.
However, firms will also sell leveraged and inverse ETFs to clients. Leveraged ETFs use the underlying basket of securities as collateral to buy additional securities. While this presents investors with the opportunity for increased profits, it also exposes investors to increased risk if the market moves against their investment.
Inverse ETFs use derivative products to structure the ETF so that it performs opposite to the performance of its underlying basket of securities. This makes leverage ETFs necessarily complex products that are meant to be held for one day only. These are trading vehicles for sophisticated investors and not suitable for many customers.
Other popular investment products include Real Estate Investment Trusts (“REITs”). REITs are created by bundling income producing properties such as hotels, hospitals, etc. They are comparable to mutual funds and trade on major exchanges. Non-traded REITs are an entirely different investment. They are not traded on national exchanges and are meant to be held eight years or longer. Therefore, they are very illiquid. There is a limited market for their sale prior to maturity. If sold before maturity, the sales proceeds will be substantially below the purchase price. Non-traded REITs are not suitable for many investors.
A recurring problem in the securities industry involves elder abuse. Industry regulators have passed rules in an attempt to curb instances of the abuse of elderly investors but instances of such reprehensible conduct continue to occur. See here, here, here and here. Elderly investors may have difficulty understanding account statements or not fully appreciate the risks entailed in investments presented to them by unscrupulous financial advisors. If you are an elderly Englewood investor, or a friend or relative of one, and have questions concerning the handling of your account, you should consult the experienced securities lawyers at Lubiner, Schmidt & Palumbo.
Englewood investors who have suffered investment losses, or question whether their brokerage account has been mishandled, have the experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo a phone call away. Contact Lubiner, Schmidt & Palumbo for a consultation.