Negligence is a general term used to describe a harm caused by someone or something. For example, the negligent operation of an automobile may lead to an automobile accident. In that scenario, the negligent driver is responsible for the damages of the innocent driver. This rule is no different in the financial industry. When brokers are negligent, investors are generally the ones who lose the most. Negligence can take many forms, but is often seen when brokers fail to limit stock losses, forget to execute trades, mistakenly purchase the wrong security, excessively use margin, and fail to monitor an investment account. In these types of cases, brokers and their firms should be held responsible for compensating the investors for their losses.
If you need help settling a dispute with your stock broker, financial advisor or brokerage firm please contact one of our FINRA attorneys at 855.327.7529.