Duty of Brokers to Customers

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What Duties Does a Broker Owe to Their Customers?

A broker owes a duty of care to their customers that demands that the broker put the interests of the customer first.  This means that the broker can trade stocks only when a customer orders it, and must follow that order precisely and try to get the best available price.  The broker must disclose any important facts relating to potential investments and not make any misrepresentations.  A brokerage firm has the duty to supervise their brokers and make sure they comply with securities laws and take proper actions if there are any violations.

What Would be Considered Violations of Securities Laws?

Federal securities laws, state "blue-sky" laws, and consumer protection statutes all act to protect customers from these various violations by brokers and brokerage firms: 

What Should I Do if My Broker Has Violated His Duty to Me?

Make sure to file a complaint with the brokerage firm the broker is working for.  You may also want to file a complaint with the Securities and Exchange Commission for any violation of securities laws.  You may be entitled to money damages for any violations by your broker that resulted to your financial detriment, so you may want to contract an attorney who has experience in dealing with securities law and securities fraud.

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Last Modified: 11-11-2011 03:59 PM PST

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