Frequently Asked Questions

INVESTOR'S RIGHTS

Investor's Rights and Remedies - Frequently Asked Questions

Q. I have lost money in my securities account. Are my broker and brokerage firm responsible? (To learn more click here)

Q. What are my broker's obligations to me? (To learn more click here)

Q. If I have lost money what remedies are available to me? (To learn more click here)

Q. I have lost money in my securities account. Are my broker and brokerage firm responsible?

A. The fact that you have lost money in your brokerage accounts does not necessarily mean that it is your broker's fault. Brokers are not guarantors of profitable investing. Most investments involve some degree of risk and uncertainty and your broker does not have a responsibility to ensure that you'll make money. If a broker guarantees that you'll make money in a particular stock or in the stock market, you should look for another broker.

Q. What are my broker's obligations to me?

A. A broker does have certain obligations to you and if he fails to live up to these obligations he and his firm may be liable to pay you all or part of your loss. Here are some of the things about your relationship with your broker that you should know:

·        A broker must comply with high standards of commercial honor and just and equitable principles of trade as established by the National Association of Securities Dealers (NASD);

·        A broker must not misappropriate or take any securities or money from your account;

·        A broker must tell you the truth about any security or transaction he or she is recommending or making in your account. This includes not lying to you and also requires the broker to disclose to you any fact that a reasonable person would believe important to know before making a decision to buy, hold or sell the security or annuity;

·        A broker must obtain your actual permission before making any transaction in your account. A broker cannot follow instructions from anyone else in your account, including your spouse, unless you have given him or her written authority to do so;

·        A broker cannot guarantee you against a loss in a security;

·        A broker cannot sign your name to any document without your authority;

·        Once you have given a broker instructions, he or she must promptly carry out your instructions in a manner best suited to serve your interest;

·        A broker must refrain from any conduct that is contrary to your interest, from conduct that is to his or her self benefit, and must disclose any personal interest the broker has in any security he or she recommends to you. This includes the fact that your broker will get a higher commission if he or she recommends a certain security to you;

·        A broker must not make or recommend excessive transactions in your account designed to generate commissions;

·        A broker should not recommend that you concentrate a large percentage of your money in one stock or one industry;

·        A broker must make recommendations that are suitable and appropriate for your investment objectives, your financial situation and your investment experience and knowledge. This means that before a broker recommends that you buy, hold or sell a security, he or she must:

o       Discuss your investment objectives with you;

o       Learn about your prior investments ;

o       Learn about your other security holdings;

o       Learn about your financial situation;

o       Periodically update your information;

o       Study the recommended security to become sufficiently informed about          its nature, price, and financial prognosis;

o       Fully inform you of the risks relating to purchasing or holding such                 security;

·        There is a dispute as to whether a broker has any on-going obligation to you concerning a recommended security that you purchased. If you make infrequent security transactions and basically buy and hold, a broker generally does not have any obligation to give you on-going advice about a security recommended to you. However, if you make frequent transactions with the same broker and have frequent meetings with him or her where you discuss your portfolio, the broker has the obligation to inform you about changes that might affect the securities he previously recommended to you. If a broker agrees to monitor your securities or your account he or she is obligated to keep informed about the markets and securities previously recommended to you and give you advice on whether to hold or sell them.

Q. If I have lost money what remedies are available to me?

A. If a broker violates any of these duties, you are entitled to be compensated. The possible remedies include:

·        The recovery of the actual losses in your account;

·        Restitution which means that you sell back the security to the brokerage firm and get your money back plus interest;

·        In some instances you can recover what your account would have been worth if ithad been better managed;

·        In some instances, you can recover attorney's fees; and

Reggie C. Giffin, P.C.
200 NW 47th Street
Kansas City, Missouri 64116
Telephone: (816) 453-2253
Cell: (816) 588-6596
Fax: (816) 453-2496
Email: rgiffin@kc.rr.com

Contact us about your legal matter today!