Stock Brokers Essay

1469 words - 6 pages

“I've known people who had fantastic ideas, but who couldn't get the idea off the ground because they approached everything weakly. They thought that their ideas would somehow take off by themselves, or that just coming up with an idea was enough. Let me tell you something -- it's not enough. It will never be enough. You have to put the idea into action. If you don't have the motivation and the enthusiasm, your great idea will simply sit on top of your desk or inside your head and go nowhere”-Donald Trump. The stock market is just a place where people invest in others ideas for profit. If all stock brokers take a legal oath or some type of legal agreement then there will be fewer frauds will ...view middle of the document...

Now the internet is a big part of our lives online stock brokers are very common. Online stock broker are okay but stock brokers from brokerages and firms are always a better choose. They tend to have better qualifications and can be trusted way more because you know their place of business. According to Securities Fraud & Protection Resource “A stockbroker has a fundamental responsibility for fair dealing. The rules and regulations of the securities industry require a stockbroker to treat his customer in a fair manner characterized by high standards of honesty and integrity”.
By having an extra professional advisor present at all sells and trades you will be at less risk of unsuitability fraud. Unsuitability fraud is when your broker makes trades and/or sells knowing that the client is not financially able to take the risk. A stock broker’s duty is to tell you about everything in the investment. The broker has to fully understand the investment and recommend the best investment. Having another professional present during the transactions of buying and selling stocks can limit the occurrence of unsuitability happening. The extra professional can interfere with the transaction that is deemed unsuitable. The extra professional can prevent the client from losing money and thus protects the client’s investment.
Stock brokers provide advice to their clients for future gain. This leaves the client at a disadvantage because stock brokers can give improper investment advice for gain in commission. A stock broker is like a teacher and the clients are like students in a classroom. Like many students the client does not do any research on information before applying their self. So the broker can instill all types of false information to the client without the client even being aware of the misconception. A stock broker can tell their client anything and make it seem like a great investment choose when it really is not. A broker who gives improper investment advice only cares about the commission they will receive and not about the client they are putting at risk. With a legal oath, documented agreements and an extra professional present improper investment advice would not happen. The extra professional will interject with the broker if false information is given. The broker will be then penalized because they are bonded by legal oath and documentation. Huge consequences can be given to a stock broker or company that gives improper investment advice. Take this as an example “A $40 million lawsuit has been filed by Sarasota County against Wells Fargo Bank, N.A. alleging improper investment advice with regard to the county’s securities lending portfolio prior to the market crash in 2008"-http://4closurefraud.org/2010/06/30/40-million-lawsuit-filed-by-sarasota-county-against-wells-fargo-bank/.
When trading stock there is no universal price set in stone. Therefore a stock broker can set high prices and hide some prices so when it’s time to pay you have all...

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