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An investor who loses his money due to careless mistakes or on porpoise fraud of his stockers or financial advisors can recover his money through an arbitration; that is a process in which a disagreement between two or more parties is resolved by impartial individuals (arbitrators) to avoid expensive lawsuits.
Stockbrokers are in charge of providing correct and complete information to investors; this kind of fraud occurs when an advisor, stockbroker or brokerage firm provides incorrect, incomplete or partial information in an endeavor to have power over the market or draw business. The Securities Exchange Commission (SEC) has determined procedures for stockbrokers and financial advisors; they guarantee that the investor is being reasonable and constant.
Stockbrokers frauds include unfair investment advice which is when an agent has predilection toward or beside a special company for reasons like: high lucrative investment banking fees form certain issuers and suggests customers according to that bias instead of current results; contradictory investment advice is when a broker gives contradicting advice to different customers and acquires or sells securities in his/her account before completing the same deals for clients; among others.
Many companies have been punished for stockbroker fraud (Merrill Lynch, for example); and others like: Bear Stearns, Credit Suisse Group, Goldman Sachs, Lehman Brothers, Deutsche Bank, UBS Warburg and others are under investigation by the New York Attorney General, Securities Exchange Commission, NASD, New York Stock Exchange and the North American Securities Administrators Association. |