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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Is identity theft a growing concern among investment companies?

Our securities fraud law firm often helps clients who have suffered harm because of faulty advice from their brokers, as judged by a reasonableness standard. Yet a broker’s fiduciary duty also extends to practical matters, such as verifying a client’s identity.

Unfortunately, fraud is a growing concern in the securities arena. According to a spokesperson from the U.S. Financial Industry Regulatory Authority, fraudulent wire transfers by email hackers are on the rise. FINRA recommends that investors utilize all optional security measures offered by their brokerage company, such as two-factor authorization.

In a recent example, a broker received an emailed wire transfer request from someone he thought was a client. However, the client’s email had been hacked. Before the fraud was discovered, the broker had authorized wire transfers to the thief.

After FINRA investigated, the broker was suspended for 10 days. FINRA determined that the broker had not used professional standards in confirming his client’s identity in the email. The broker’s employer also reimbursed the client for the full amount.

Our law firm’s position is simple: we believe that any losses suffered due to a broker’s negligent actions should result in compensation to the victim. However, proving negligence according to industry standards is not always as easy as the example in today’s story. In addition, there may be a choice of forums, such as pursuing compensation before a FINRA arbitration panel or by bringing a lawsuit in court. In these matters of gathering evidence and developing legal strategy, our California securities law firm can fight for your rights.

Source: CNBC, “Fraudsters filing fake email transfers to fool brokerages,” Susan Antilla, April 24, 2017

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