All investors exercise a large degree of trust in their stock brokers and tend to hold great trust in their advisers. Others that understand the market better often handle their own purchases in this time of digital technology. With the rise of employer-employee contribution savings plans the number of investors has grown dramatically, as evidenced by the rise in Dow trading volume. There is also a significant climate for investor fraud where public trading through centralized investment institutions can aid a fraudulent company in covering their weaknesses and overstating their strengths. It is important to remember that there are investment statutes that specifically protect the investor.
Responsibility of the Company
The Sarbanes-Oxley Act of 2002 established a non-profit corporation approved by Congress that would establish informational and accounting standards for all companies that are publicly traded. In addition, The Public Company Accounting Oversight Board is under direct oversight of the Securities Exchange Commission. According to our stock fraud attorneys, the SEC can remove board members from the PCAOB in the event of predetermined inaccuracy or failure to comply with the law. They can also field complaints about companies that are not compliant or have purposely altered the financial stability of the company. These are the companies that normally provide much smaller return on investment, or ROI.
Responsibilities of the Broker
Companies that consistently miss their expected earnings statement could also already have a negative record. For investors using a brokerage, the broker must also vet the company info and deliver an accurate assessment of the stock performance. Brokers that promote the purchase of these stocks could also be liable in civil court. It is important to remember that there are legal remedies for all parties involved. However, these cases can be difficult because the determination of premeditated misrepresentation can be problematic to the court. The broker also has a legal remedy against the company if the company has purposely filed an erroneous claim about company stability and earning power, so the claim could easily be an et al legal claim. This issue is especially true in some 401 (K) retirement plans handled by major financial management groups. Always remember that the money being invested is actually your money and it is always a good idea to keep close tabs and do significant homework before authorizing a stock purchase. Even if you are a novice at investment, do not leave it all up to the agent.
Any individual with significant investment resources should always have a securities fraud attorney on notice of some type, regardless of a filed claim. Many investors hold one on retainer or at least know who they will call if needed. An experienced securities fraud attorney will know where to look to establish negligence or malfeasance by any party of any transaction and can be very helpful before any transaction is made. They will also know how to pursue any possible claim and sometimes the broker may want to join the filing. There is a natural assumption of risk for any investor choosing to invest in a publicly traded company, but there are still several avenues for legal recourse in the event of fraudulent activity by a company in which you hold an investment. Always be ready to protect your investment because you are also protecting your financial future.
Chris Bennett is a legal researcher and contributing author for Page Perry, LLC, who are Atlanta based stock fraud attorneys. To ensure your rights are protected, it is recommended you contact an experienced attorney to represent your interests. Page Perry LLC has special experience in the area of fraud and breach of fiduciary duty litigation.
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Source: http://www.usblawg.com/commercial-law/roi-when-what-you-see-isnt-necessarily-what-you-get/
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