Some Brokers Are Taking Advantage Of Investors During The COVID -19 Coronavirus

Watch Out for Brokers Looking to Make High Commissions During COVID-19

With the market crashing in the wake of the Coronavirus (COVID-19), many investors are suffering from massive losses in their portfolio and are looking to their brokers for investment advice.

Unfortunately, not all stockbrokers work with their customers’ best interests at heart, breaching their fiduciary duty in the process. There are also unscrupulous registered representatives who may even seek to take advantage of these hard times and try to persuade investors to buy into risky investments that charge high commissions. Such fraudulent and negligent behavior will lead to even more investment losses and ultimately, acts of stockbroker misconduct. 

At Shepherd Smith Edwards and Kantas (SSEK Law Firm), our broker fraud attorneys have helped our clients recover their investment losses during the most turbulent times of the past thirty years, including 9/11, the 2009 market crash, the Puerto Rico bond collapse, and many other big events. 

We are here for investors today as this unprecedented period of uncertainty continues to unfold and impact the stock markets and your investments. 

You should know that what may seem like investment losses caused by the Coronavirus and resulting market volatility may, in fact, be a result of broker fraud or negligence. Contact us today for your free case consultation. 

Broker Fraud Alerts: List Of Investments That Some Brokers Are Pushing On Customers During COVID-19

Variable And Fixed Annuities 

Already, our investment fraud attorneys have been hearing about stockbrokers trying to sell this product as a “guaranteed” way to protect principal. 

However, considering that gains involving fixed and variable annuities are limited even in a rebounding market, the upside may not be worth your while at this time – not to mention that annuities tend to charge high commissions of around 7% or greater. Unless you’re willing to NOT withdraw these funds for years, you can expect to pay a huge penalty for taking your money out sooner. 

Private Placements

Regardless of what’s going on in the market, private placements are only ever suitable for the most experienced investors. Yet, some brokers are touting this as an option that customers might want to look at outside the markets. Our private placements fraud lawyers are here to tell retail investors that now is NOT the time to get involved in these illiquid, high-risk investments that also charge high commissions. 

Indexed Universal Life Insurance (ULs)

Promoted by brokers and insurers as a profitable way to make money while offering death benefit protections, indexed universal life insurance policies tend to depend on market growth before investors can make money. Premium payments can rise annually, and these investments have been known to lose value, with returns sometimes significantly capped.

SSEK Law Firm has successfully helped investors recover losses involving all of these investment types. If you have recently been advised to take on one of these investment types as part of your portfolio, it may be worth looking out for signs of broker fraud.   

What Qualifies Breach of Fiduciary Duty?

Any time a broker recommends an investment to a customer, they must:

  • Understand the risks and benefits involved for that client.
  • Only make the investment recommendation if it is suitable for the customer’s investment goals, portfolio, and risk tolerance level. 
  • Make sure that investor is not only given all the information they need about the investment, but also they understand what it is, the risk involved, and the benefits.
  • Not omit or misrepresent any information about the investment or strategy.

A failure to do any of these can be grounds for a breach of fiduciary claim against the broker and their broker-dealer. SSEK Law Firm has dealt with many investors over the years who have filed broker fraud claims when their financial advisor or stockbroker failed in their fiduciary duty. 

Stockbroker Fraud Attorneys

SSEK Law Firm is doing everything at this time to protect our clients and helping investors throughout the US to recover losses. Contact us online or call us today on 800-259-9010 to receive a free, no-obligation case consultation.

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