Broker Misconduct

Experienced New York Attorney Advocating for Investors Nationwide

Investors typically trust the brokers whom they hire to provide appropriate investment advice and to comply with the obligations imposed by securities regulations. Brokers do not always comport themselves in accordance with their duties, however, and broker misconduct can cause investors to suffer significant losses. If your broker's misconduct caused you to sustain financial harm, it is in your best interest to meet with a trusted securities attorney as soon as possible to discuss the facts of your case and your options for pursuing damages. Irwin Weltz at Weltz Law is a New York securities lawyer who will work tirelessly to help you recover any damages that you may be owed. Weltz Law will zealously represent investors harmed by broker misconduct in securities arbitration and litigation in New York and nationwide. We can develop compelling arguments in support of your claims to help you pursue any damages that you may be able to recover.

Broker Misconduct 

Broker misconduct is a broad term used to encompass any action or inaction in which a broker engages that violates the duties owed to his or her client. Brokers are required to gather material information regarding their clients, diligently research any investments, and make suitable investments on a client’s behalf. Brokers are also required to be candid with their clients and refrain from making inappropriate trades.

Margin Trading

In simple terms, margin trading is the act of borrowing funds from a brokerage firm to invest in securities. The brokerage firm charges the investor interest on the borrowed funds and has the right to sell any securities in the account if the value of the account decreases. While margin trading is extremely risky for investors, it can be very profitable for brokers. Thus, brokers may engage in margin fraud or abuse with the intent of generating excessive fees and commissions.


In most cases, a strong investment portfolio is diversified, with funds invested in a variety of stocks and bonds. Overconcentration occurs when a broker invests in a limited number of stocks or in a single segment of the economy, such as pharmaceutical stocks. Investing in only one class of assets may constitute overconcentration as well. Overconcentration is an example of broker misconduct that violates the duty of suitability.

Account Churning

Account churning is excessive trading for the sole purpose of generating fees and commissions. This type of misconduct occurs when brokers buy and sell securities excessively, solely to generate commissions. Account churning is a violation of the rules and regulations that pertain to securities transactions, and it often constitutes fraud.

Unauthorized Trading

Brokers are required to obtain a client’s verbal or written authorization prior to buying or selling any securities. When a broker violates this duty, it is considered unauthorized trading. Unauthorized trading is unethical and can result in substantial financial harm. If an investor suffers losses due to unauthorized trading, he or she may be able to pursue claims of fraud, negligence, and misrepresentation against his or her broker.


Even if a broker is not acting with the intent to harm, his or her actions may still constitute misconduct. Brokers are expected to uphold a reasonable duty of care in handling clients' investment accounts. A broker who breaches this duty may be found to be negligent and may be held accountable for any losses suffered due to his or her negligence.

Speak with a Trusted New York Attorney About Your Options for Seeking Damages

Whether broker misconduct is negligent or intentional, brokers should be held accountable for the losses that they cause. If you suffered monetary losses due to broker misconduct, you should speak with an attorney regarding the damages that you may be able to recover for your harm. Attorney Irwin Weltz at Weltz Law has been representing parties in securities disputes for over 25 years. Weltz Law is based out of New York and regularly represents clients in securities arbitration forums and in litigation in state and federal courts nationwide. We can be reached through our online form or at 877-935-8952 to schedule a meeting regarding your case.

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