It is the duty of a broker to make investment recommendations to a client that are consistent with the customer's risk tolerance, needs and investment objectives. An investment may be unsuitable if: 1) A customer does not have the financial ability to incur the risk associated with a particular investment. 2) The investment was not in line with the investor's financial needs. 3) The customer did not know or understand risks associated with certain investments. Examples of unsuitable investments: 1) Putting the accounts of older or other investors requiring steady income from dividends into high-risk investments such as technology stocks or options accounts. 2) Putting tax free investments, such as municipal bonds, into an account that is already tax free, such as an IRA account. 3) Often an unsuitable investment occurs because the broker is trying to force his client into an investment where he has a direct self-interest, such as a stock that his firm has a contract to sell. Other examples can occur when the brokerage is underwriting a new stock or has an interest in inflating a stock's value (see High-Pressure Selling).

Contact Us | ML Lawsuits | SSB Lawsuits | CSFB Lawsuits | Churning | Unauthorized Trades | Unsuitable Investments| Failure to Place Order | High Pressure Sales | Overconcentration | How the Law Works | Home

---

We are a network of attorneys who handle Stock Broker Fraud in the United States
Submit your case for confidential discussion with an attorney.