Broker and Financial Advisor Fraud
Theft by conversion occurs when a person or entity obtains the possessions of another legally and converts those possessions for their own use without permission. Those possessions can be securities, money, funds, or personal property.
In recent years there has been an increase in the number of brokers and financial advisors engaging in broker theft under the guise of legitimate financial advice. While it may seem simply unbelievable that a broker or an investment advisor would misappropriate or steal from a client, it happens all the time.
A common example of theft by conversion or misappropriation is when a broker or broker-dealer uses its relationship to an investor to obtain assets for investment purposes and converts the money to a sham investment and steals the money. Other examples include forged documents, excessive advisory fees or churning, private “investments” controlled by the broker, Ponzi schemes, and cyber theft. Also remember that if a broker ever asks to borrow money, don’t do it. It is highly inappropriate for brokers to ask investors to borrow money and when they do, it usually results in broker theft or misappropriation of assets.
The attorneys at Gana Weinstein LLP represent investors in all fifty states in arbitrations through the Financial Industry Regulatory Authority or FINRA. Our attorneys specialize in broker theft, conversion and misappropriation by broker’s and broker-dealers and have represented dozens of victims in similar situations.
The key element of broker theft, conversion or broker misappropriation is that the broker obtained the money lawfully and with the investor’s permission. However, once the asset was obtained, the broker unlawfully stole the money of their own gain. This happens all too often. This of course is different that robbery or burglary where the assets are obtained unlawfully.
If you believe you or someone you know has been a victim of broker theft, the first thing you should do is call an attorney that specializes in broker theft. The broker theft attorneys at Gana Weinstein can help you determine if a broker actually stole your money and if so, what avenues of recourse might be available to you.
Many times, the broker theft attorneys at Gana Weinstein LLP will look to the broker’s employer for compensation for our clients because the brokerage firm is responsible for supervising the conduct of its brokers. If a broker converts assets, the broker’s employer may also be on the hook for civil liability, criminal sanctions, disciplinary actions by FINRA or the SEC and will likely be responsible to compensate the investor victims.
Before making any investment with a broker, you should research the broker to make sure you know exactly what you are investing in. If you want to avoid broker theft, conversion or misappropriation, you should make sure the investment is real, and that there is a proven track record of success. Remember, if an investment sounds to good to be true, then it probably is and you should move on. Remember to go to FINRA's Website and look up your broker to see if he has had any customer complaints related to broker theft or conversion. You can also see if your broker is the subject of any judgments or liens which would indicate that the broker is having money troubles. Broker’s with customer complaints, judgments or liens, are far more likely to attempt to convert customer assets in our experience.
Put simply, an investment advisor or a broker is absolutely barred from misappropriating, borrowing, converting, stealing your money under any circumstances. If you suspect that your broker or investment advisor is misleading you about your investments, the amount you are investing or the value of your investments, you must investigate. Our attorneys are here to help you inquire, investigate and verify the well-being of your accounts and to bring FINRA arbitrations if necessary.
To learn more about securities topics and potential claims please visit our Securities Arbitration page. The broker theft attorneys at Gana Weinstein LLP represent investors throughout the United States in FINRA arbitrations. Our consultations are free of charge and the firm is only compensated if you recover.