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What are some situations that can lead to a securities claim?

Hubbard Snitchler & Parzianello

Sometimes investors in Detroit experience losses that are simply due to the current economic conditions. Other times, however, investment losses are due to wrongdoing that has nothing to do with market forces. When this happens, it could give rise to securities litigation. The following are some situations in which pursuing a securities lawsuit may be an option.

Brokers violate their breach of fiduciary duty

Brokers have a position of trust when it comes to managing investments. This means they have a duty of loyalty and a duty of fidelity. If these duties are violated, it could give rise to a legal claim.

Conflicts of interest by securities analysts

Many large securities firms are involved both in banking activities as well as stock analysis. Analysts in such firms may give a specific stock a good evaluation if the company whose stock it is also on the banking side of the firm. Or, an analyst may give a low evaluation to competing businesses of their clients. Either of these activities constitute a conflict of interest that could lead to litigation.

Brokerage malpractice

Stockbrokers and analysts are professionals that are supposed to provide high-quality services that other professionals with equal training would provide. If they provide substandard services by giving misleading advice, causing their clients to make poor investment choices and thus lose money, this may constitute malpractice that gives rise to securities litigation.

Seek assistance with securities litigation

These are not the only situations that can give rise to securities litigation; there are others. In addition, this post does not contain legal advice and should not form the basis of any specific legal claim. Securities law is highly complex. Therefore, those who believe they have cause for pursuing a securities claim may want to seek the advice of a professional to better understand their legal rights and options.

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