Long Island Criminal Defense Lawyers

Stock Fraud usually takes place when brokers try to get their customers involved into trading stocks without taking into consideration the interests of the customers. Stock Fraud can happen at a company level, or can be committed by a single stockbroker. Stock Fraud can also vary in size from multi-million deals to penny stocks, but it consistently involves the intentional disregard for the financial situation of the customers and with personal profits.

There are several forms of broker-related Stock Fraud:
Misrepresentation/Omission – occurs when a broker intentionally misleads the customer about material facts regarding the stock.
Unsuitability – occurs when brokers recommend stocks that are outside the client's risk tolerance.
Overconcentration – failure to diversify a client's portfolio.

Churning –  is used in order to create additional broker's fees. Churning requires large numbers of transactions; often this form of Stock Fraud consists of selling stocks with small gains in order to show a profit.