Tenafly investors who believe their securities and/or retirement accounts have been mishandled by their financial advisor need to consult with the experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo. The securities litigation lawyers at Lubiner, Schmidt & Palumbo include a former New York City prosecutor, a former in house attorney at a major brokerage firm and a former stockbroker. The securities group at Lubiner Schmidt & Palumbo has over 30 years of experience in the securities arbitration and regulatory fields. The firm’s attorneys have handled securities cases throughout the nation including but not limited to New Jersey and New York. The firm has handled hundreds of securities arbitrations run by the Financial Industry Regulatory Authority (“FINRA”). Lubiner Schmidt & Palumbo attorneys have a thorough understanding of the best practices in the brokerage industry. The attorneys are completely familiar with the industry rules that establish how brokers, their assistants and supervisors are required to discharge their responsibilities to their customers. If a Tenafly investor believes her account has been mismanaged, the experienced securities attorneys at Lubiner, Schmidt & Palumbo can ascertain what went wrong and begin the process of recovering any losses.
Securities fraud is a term that can be used to describe several objectionable and improper actions on the part of brokerage firms and their employees. For instance, a broker is obligated to know several pertinent details about a client before making a recommendation to the client: the client’s financial background, investment experience and knowledge, investment objectives and risk tolerance, to name a few. If a broker recommends an investment to a client that does not comport with the investor’s objectives, risk tolerance, etc., that investment may be unsuitable for the client. Any losses occasioned by that unsuitable investment are recoverable.
Brokers are also required by securities rules to discuss any investments with the client before placing an order (unless the client has given the financial advisor written discretionary authority). If a broker places a trade in a customer’s account without the client’s prior approval, that unauthorized trade is illegal and the client is entitled to recover any losses that result from that trade.
Brokers may recommend to a client that the client engage in margin trading. Brokerage firms will extend loans to their customers using the securities in their account as collateral for the loans. The loans are reflected in the client’s monthly account statement, as is the interest charged to the client monthly. The client may use the loan to purchase additional securities in his account. While this creates the opportunity for additional profits if the market moves favorably, it also increases the risk of additional losses, including the forced selling of securities to meet margin calls, should the market move against the client’s position. Margin trading is not suitable for many clients and/or clients may not fully appreciate the risks in that trading strategy.
Unfortunately, the financial abuse of senior citizens is an all too frequent occurrence in the securities industry. Regulators have passed rules to specifically protect elderly investors but the instances of elder abuse continue. See here, here, here and here. Elderly Tenafly investors may have difficulty reading account statements or not understand the risks involved in investments recommended by their financial advisors. If you are an elderly investor, or a friend or relative of an elderly investor, with questions concerning transactions in the investor’s account, the experienced securities litigation attorneys at Lubiner, Schmidt & Palumbo can assist you.
Tenafly investors also need to be wary concerning the number of complex investment products that are available on the market – many of which may not be appropriate for many investors. Variable annuities are contracts in which, in return for a lump sum payment or payment overtime by the investor, the annuity company agrees to make payments to the investor (“annuitant”) either immediately or some time in the future. The funds deposited by the annuitant are typically invested in mutual funds. The funds can be moved among various mutual funds, with no penalties or tax consequences for the annuitant. The annuitant can also purchase a guaranteed death benefit, a guaranteed minimum value benefit, etc.
However, for at least six years, and sometimes as far out as twelve years (the “accumulation phase”), the annuitant can only withdraw funds from the annuity by paying a deferred sales charge, starting at 10-12% of the withdrawal, which declines annually. There are also tax penalties if the annuitant is under age 59 ½. A Tenafly investor who is considering purchasing an annuity should make sure she completely understands how a variable annuity works before purchasing one.
The experienced securities fraud attorneys at Lubiner, Schmidt & Palumbo are ready to assist any Tenafly investor who believes her broker has mishandled her account, or has questions concerning activity in her account or the purchase of a particular investment product. Contact Lubiner, Schmidt & Palumbo for a free consultation.