Helping Investors Protect Their Rights

Did your broker have a conflict of interest?

On Behalf of | Dec 3, 2021 | Broker Misconduct |

When you started investing, you trusted your broker to make decisions that were in your best interests. That’s what you were paying them for. They had the expertise and you wanted to give them compensation if they would use that expertise to help you earn money on your Investments.

But were they actually acting in your best interests at all times? Or could they have had a conflict of interest that would lead them to give you advice that may not be the best for you? If so, they may have violated your rights and the agreement that the two of you made when you started working together.

The problematic role of bias in transactions

The idea of bias is a fundamental part of a conflict of interest. It means that your broker is biased in some way, either for or against you or another party.

For instance, maybe you’re interested in investing in tech companies because you believe they are the future. You tell your broker that you want to find some of the best up-and-coming stocks for small tech companies. You know you’re probably not going to invest in the next Apple or Facebook or Amazon, but you hope to find something that will give you a good return even if there’s a risk.

Your broker helps you invest money in a small company that they tell you is a good bet. However, you then find out that the owner of that company is the broker’s spouse or perhaps another close family member. Did they actually tell you to invest in that company because they thought it was a good investment that would make you money, or were they actually acting in their own best interests or at least in the best interests of a person that they’re close to? Were they using you to generate money for the company?

It’s not hard to understand how this type of conflict of interest can cost you money, undermine your relationship and violate your rights. The financial ramifications can be huge. Even if it works out, you may have questions about why your money was used in such a way. At a time like this, it is very important that you understand the legal options you may have if your broker did not act with the level of professionalism and trustworthiness that you deserve.