Despite the increasing popularity of online trading companies that allow consumers to buy and sell their own stocks, the majority of Americans rely on brokers and financial advisors for most, if not all, of their investing decisions. In fact, the buying, selling and managing of stocks, bonds, and mutual funds (known collectively as securities) is a major industry unto itself.

Because the financial stakes are so high, and because such a large portion of the U.S population is involved in stock market transactions, a framework of laws and regulations has been put in place to protect investors. These laws exist at both the state and federal levels. Breach of these laws, particularly when done with intent to deceive the investor, is known as securities fraud.

There are many ways in which an individual or corporation may commit securities fraud. Some of the more common include:

• Breach of fiduciary duty—violating the fundamental relationship of trust with a customer.
• Conflict of interest—making decisions based on a potential personal benefit.
• Insider trading—buying or selling stocks based on inside information.
• Market manipulation—purposefully fostering a false impression about market performance.
• Failure to diversify—creating undue risk by failing to spread a client’s money over a variety of investments.
• Churning—excessive trading to increase broker commissions.
• Misrepresentation—intentionally providing incorrect information about a company or investment.

Although most often associated with stock brokers, securities fraud may be committed by a number of parties, including financial advisors, corporations that misrepresent the financial health of a company, and individual investors who make buy or sell decisions based on inside information.

Enlisting the services of a knowledgeable and experienced securities attorney is the best way to ensure that your rights are protected and you receive the full value of the damages suffered. Damages may include the actual loss incurred, loss of income that would have been earned with sound investments, interest and legal fees. In some cases, a large number of people are victims of a specific instance of securities fraud. When this happens, the most logical legal step may be the filing of a class action lawsuit.

The attorneys of Belt Law Firm, P.C. are dedicated to advocating for the rights of plaintiffs and consumers in this area. For your free class action consultation fill out our contact form or call us at 888-933-1514 (toll free).