Breach of Fiduciary Responsibilities

Alabama, Georgia, Florida

A Trusting Relationship
A fiduciary duty is the responsibility to act in another person's best interest. It exists when there's a trusting relationship between a customer and professional such as lawyer-client, therapist-patient, and guardian-minor. Fiduciary duty is the highest standard of duty implied by law.

The relationship between you and your stockbroker is a fiduciary relationship if you look to your broker for advice, and he or she is aware of that responsibility and accepts it. When this type of relationship is present, your stockbroker is required to exercise loyalty, good faith and care toward you. If your broker violates that trust and you incur losses, he or she may be held liable.

Good Investment Decisions
To have valid claim for breach of fiduciary duty, you broker must have discretionary authority to manage your account. You give him or her this authority when you open your account, along with information about your tax needs, risk preferences and financial goals. From this information, your broker creates your investor portfolio and becomes legally obligated to make good investment decisions on your behalf.

Initial Terms Upheld
You can give your stockbroker written permission to make trades without first consulting you, but these terms must be agreed upon from the beginning-the day you open your account. If this hasn't been done, your broker may be held liable for breach of duty. When your broker violates your trust by taking advantage of you in any way-even if you don't recognized it immediately-he or she can be held responsible for any losses you incur.

A broker can breach fiduciary duty in different ways. He or she can engage in activities that result in significant losses such as:

• Making unsuitable recommendations
• Making unauthorized transactions
• Churning
• Making misrepresentations or omissions
• Overconcentrating
• Failing to diversify your account
• Giving you bad investment advice
• Engaging in mutual fund fraud or annuities fraud

If you have incurred losses and believe that your stockbroker has breached your fiduciary trust, please contact the stockbroker malpractice lawyers at Burke, Harvey & Frankowski. Serving the residents of Florida, Georgia and Alabama, we are experienced in handling securities fraud claims and can help you recover your losses and collect the damages you deserve. Call or e-mail us today for a free consultation.

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