What types of cases can be brought against investment advisers?

  • The most common are claims involving churning, unauthorized investments, or investments that are unsuitable for the investor.
  • Churning involves excessive trading to generate commissions for the broker rather than profits for the investor.
  • Unauthorized investments involve investments where the professional has not gotten consent of the customer to execute the transaction before the investment advisor does so.
  • The most common claim against an investment professional is what’s referred to as unsuitable trading.
  • Suitability requires that an investment professional recommend investments that are suitable to the customer in two ways.
  • They have to be suitable to the customer’s investment desires.
  • They also have to be suitable for the customer’s objective investment needs.
Cohn, Lifland, Pearlman, Herrmann and Knopf LLP