Can I Sue My Financial Advisor?

Can you sue your financial advisor? Yes, you can. You can file an arbitration claim to seek financial compensation when an investment advisor, stockbroker, or brokerage firm fails to comply with FINRA’s rules and regulations, and you lose money as a result. The next question is, do you have a valid claim?

The Most Common Reasons That Stockbrokers and Financial Advisors Are Sued

Stockbrokers and financial advisors fail to live up to their professional duties in a variety of ways. In some cases, investor lawsuits and arbitration claims involve allegations of outright theft or forgery of documents. In other cases, negligent brokers steer an investor’s money into risky, inappropriate ( unsuitable ) financial products in order to obtain higher commissions. Our law firm handles all types of investment fraud and broker negligence claims. Some of the most common examples of cases that we see include: Breach of Fiduciary Duty: Under the Investment Advisers Act of 1940 , certain investment professionals, known as registered investment advisors (RIAs) , owe fiduciary obligations to their customers. Your RIA must always look out for your best interests. If you lost money because of your RIA’s breach of fiduciary duty, you may be entitled to compensation for the full value of your damages. Unsuitable Investments: Many financial advisors are not fiduciaries. Instead, they are held to the suitability standard. These stockbrokers and financial advisors can only sell and recommend financial products that are appropriate for a customer’s unique investment profile. If you lost money in unsuitable investments , you should consult with an attorney immediately. Material Misrepresentations or Omissions: Brokers have a duty to make fair and honest representations to their clients. If they fail to do so, and an investor loses money due to a misrepresentation or a material omission , the broker may be liable for the investor’s losses. Lack of Diversification: Brokers must also act with the appropriate level of professional skill. Pushing a customer into over-concentrated investments is highly risky. Brokers can be held liable for losses sustained because of an investor’s inappropriate lack of diversification . Excessive Trading (Churning): Stockbrokers and financial advisors must have a well-grounded, reasonable basis to execute all trades. Unfortunately, there are cases in which brokers will frequently trade on a customer’s account, simply to increase their own fees. This unlawful practice is known as churning . Unauthorized Trading: Brokers must have the proper legal authority to make transactions on behalf of a client. If you lost money because your broker made trades that you never approved of, you may have been the victim of unauthorized trading . You should consult with an experienced attorney.

Insurance Executive Greg Lindberg Indicted, Faces Allegations of Perpetrating $2B Fraud

“The indictment indicates a massive fraud by Greg Lindberg and others, which ultimately harmed investors and policyholders. Sonn Law represents investors who were harmed by Lindberg’s alleged scheme.”

Attorney Jeff Sonn, Sonn Law Group

Greg Lindberg Indictment — Click to download the full text of the indictment.

Greg E. Lindberg, a former insurance executive from North Carolina, has been indicted on charges related to a massive $2 billion fraud scheme, according to a press release from the US Department of Justice.

Lindberg and others allegedly deceived state insurance regulators and defrauded thousands of policyholders and others in connection with insurance companies he controlled from at least 2016 through 2019.

He allegedly deceived the North Carolina Department of Insurance and other regulators, evaded regulatory requirements meant to protect policyholders, concealed the true financial condition of his insurance companies, and improperly used insurance company funds for his personal benefit, including financing his lavish lifestyle.

Lindberg is charged with one count of conspiracy to commit crimes in connection with insurance business, wire fraud, and investment adviser fraud; one count of wire fraud; four counts of false insurance business statements presented to regulators; six counts of false entries about the financial condition or solvency of an insurance business; and one count of money laundering conspiracy. If convicted, he faces a maximum penalty of 20 years in prison on each of the top counts.

One of Lindberg’s top executives, Christopher Herwig, pleaded guilty in a related case in December 2022. Separately, Lindberg is also awaiting retrial in a case in which he faces several charges stemming from alleged attempts to bribe the Commissioner of the North Carolina Department of Insurance.

Were You Harmed by Greg Lindberg’s Alleged Fraud?

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