Customer Claims Against Brokerage Firms and Individual Brokers, Securities Lawyer

QUESTION

What is an unsuitability claim?

ANSWER

The rules of various regulatory bodies state that a broker must attempt to learn the essential facts about each customer's needs and objectives. Thereafter, the broker is prohibited from recommending a specific trade or course of trading that is unsuitable for the customer's needs and objectives. If a broker has recommended unsuitable trades for a customer's non-discretionary account or made unsuitable trades in a customer's discretionary account, the broker may be held liable for the losses sustained.

< Back to FAQs