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Financial Advisor and Investment Negligence Claims

What is Investment Negligence?

Negligence is any conduct that falls below the standard of care that a reasonable, prudent person would have utilized in the same situation.  The standard of care for financial advisors is derived from multiple sources, including industry standards, FINRA rules and the brokerage firm's compliance policies and manuals.

Financial advisors owe a standard of care to clients that is defined by various duties imposed by law.  Some of these duties include: recommending suitable investments; properly researching investments prior to recommending investments to clients; and following the client's instructions with respect to investment goals and specific transactions.  If a financial advisor breaches one of these duties and causes an investor to lose money, the financial advisor (and the brokerage firm) may be found liable.  

A Broker's Intent is not Relevant or Required

To be held liable for negligence, it is not necessary for the broker to have intended the consequences of the negligent act.  The only requirement is that a duty existed and the financial advisor breached the duty by failing to adhere to the standard of care of a reasonable prudent person, which is usually proven through the testimony of an expert.    

At Lufrano Law, LLC, our attorneys have extensive experience bringing negligence claims against stockbrokers, financial advisors, brokerage firms, clearing firms -all related to investment negligence and other misconduct.  Please contact us today for a free, no-commitment consultation.

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