Know Your Rights – Behaviours that get Brokers ‘Behind Bars’

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Feel that some of your broker’s actions may fall under the “illegal” category? This article will explore some of the most popular examples of stockbroker fraud. Keep this checklist handy, and don’t hesitate to expose your intermediary, if you find that any of these hold.

Fund Conversion

There’s hardly a way to sugarcoat it – this is full on stealing. A broker engaging in fund conversion, draws money out of their clients’ trading accounts, and uses direct scheming to cover it up.

To be fair, people who normally fall target to this theft are the more vulnerable – the elderly or disabled, who are under-informed as to their accounts, and can be easily influenced by their broker’s supposedly good will.

Supply of False information

If you find a broker giving you false information in order to influence your trading choices – this sums up to investment fraud. Same goes for acknowledged omittance of vital trading information. Although this one can be a bit of a challenge to prove, it’s something that can be addressed appropriately.


Sure, keeping your finger on the pulse as well as taking comparatively quick decisions, is part of success in the markets. Nevertheless, brokers who encourage excessive trading are committing fraud. If you find your broker calling you every hour with twenty new opportunities for investment, it’s likely they are just looking to up their commission with the frequency of trades, and not actually thinking of your long-term trading strategy.

Unauthorized trading

Even if your broker insists they have your best interest at heart, there is no circumstance in which they are allowed to take control of your positions. Executing trading on your behalf, without your consent, is a violation of your rights and it’s punishable by law.

Breach of Contract

Brokers are obliged to fulfill the terms of contract provided. If you notice a breach of terms – you have a right to demand their fulfillment.

Truth is, any potential issue on the horizon is easier to handle when you opt for a licensed and regulated broker. The appropriate higher authority, based on country of establishment, ensures you don’t get scammed, and always takes care of your investment in case fraud issues are to arise.

Risk Warning: CFDs are complex instruments that come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts, lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.


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