New Securities Fraud Hotline Blog

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Eppenstein and Eppenstein announces the creation of the new Securities Fraud Hotline Blog, providing information and insights on current business news that is relevant and of interest to the business community and investing public.

Top 5 Investor Tips You Must Know to Protect Yourself from Deceptive Brokers

Eppenstein and Eppenstein, the New York-based law firm of national and international securities fraud and commercial litigation attorneys who have recovered approximately $50 million for their clients in the past five years, has a new blog at

The purpose of the blog is to provide information and insights on current business news that is both relevant and of interest to the business community and the investing public. Senior partner Theodore Eppenstein, who argued on behalf of investors before the U.S. Supreme Court in the landmark Shearson/American Express, Inc. v. McMahon case, assists investors, employees and businesses with valid claims to recover their losses in court or arbitration.

Mr. Eppenstein’s expanded list of common broker and brokerage firm abuses includes over twenty practices which can be accessed easily through the internet portal to the firm’s website,, or directly on the firm’s main website at Each one of these potential claims is fact-specific and can differ according to jurisdiction.

According to Mr. Eppenstein, the five most common investor claims of broker misconduct are: breach of fiduciary duty; recommending unsuitable investments; fraudulent misrepresentation or omission to state material facts; breach of contract; and churning or excessive trading.

Five Most Common Claims Against Brokers

Unless a broker is merely an order taker, he may be acting as a fiduciary of the investor. Granting discretion to the broker is an excellent example of the broker being given special ability to trade a customer’s account without seeking approval first. Many cases have been filed against brokers who abused this relationship by placing their personal benefit above the interests of their client.

Unsuitable investments are those recommended by the brokerage firm to the customer that do not match up with the customer’s investment objectives or risk tolerance. The losses resulting from speculative investments with high risk to an individual’s retirement account, if it was opened to preserve capital with limited risk, can easily fall into this category.

Fraudulent misrepresentations can consist of knowingly false communications given by the broker to the customer, or the failure to give adequate notice about the risks or nature of investments which the consumer relied on and resulted in investment losses.

Typically when investment accounts are opened, contracts are executed which govern the dealings between the brokerage firm and the customer. When the provisions of these contracts are violated and cause investment losses, claims for those losses are often asserted.

Excessive trading or “churning” can occur when brokers trade more to earn their commissions than to make profits for their customers. The trading patterns of brokers who make recommendations for heavy trading should be investigated for possible claims.

Tips to Investors to Prevent Abuse and Recover Losses

Recent Securities Fraud Hotline Blog postings by the Eppenstein firm are instructive on how to avoid becoming the victim of securities fraud, commodities fraud and other investment abuses. The “Top 5 Investor Tips You Must Know to Protect Yourself from Deceptive Brokers” is a brief but clear-cut set of guidelines for investigating your investment advisor, establishing a personal relationship with your advisor and the branch manager instead of using an anonymous call center, knowing your investments, avoiding the practice of giving full discretion to a stock broker and writing down and confirming your investment objectives and risk tolerance to your broker and his supervisor.

The Securities Fraud Hotline Blog posting “What to Do If You Suspect Securities Fraud” gives a simple 3-step plan of action you can follow to try to recover your investment losses: gather your investment records; set up a client meeting with an attorney experienced in investor rights and protections to discuss the facts of your case; and get on the fast track to file your case, since there are various statutes of limitations that may apply to actions and eligibility rules at the SRO (self-regulatory organization) forums that normally adjudicate such claims, such as the National Association of Securities Dealers (NASD) and the New York Stock Exchange (NYSE).

For additional information about the new Securities Fraud Hotline Blog and to read our postings, contact Theodore G. Eppenstein, or visit the firm’s Blog at

About Eppenstein and Eppenstein:

Eppenstein and Eppenstein, in business over 25 years, is a respected New York-based litigation firm with a domestic and global practice, widely known nationally and in the international community for protecting the rights of defrauded investors and businesses, as well as for obtaining significant arbitration awards for their clients. The attorneys at Eppenstein and Eppenstein--securities, commodities and commercial litigation lawyers--have extensive experience representing investors in actions against securities and commodities brokers and their broker dealer firms and representing individuals and businesses in commercial litigation. They have successfully recovered millions of dollars in assets for investors, including a record-setting $46 million USD recovery in 2002 against Refco Inc. The portal to the firm’s newly updated website,, is an introduction to the firm’s history of successful representation of investors and businesses.

Theodore G. Eppenstein, the firm’s senior partner and a practicing securities fraud and commercial litigation attorney, is frequently called upon to author articles and speak at conferences on investor rights and securities fraud and commodities fraud litigation and arbitration, including appearing as a primary speaker in symposia at the Moscow Interbank Currency Exchange in 2000 and at the Cairo-Alexandria Stock Exchange in 2003. He is a two-term member of SICA, the Securities Industry Conference on Arbitration, an advisory group to the Securities and Exchange Commission, and has testified in Congress twice to try to level the playing field in arbitration for aggrieved investors. Mr. Eppenstein has been quoted frequently in the major media, including the major financial magazines and newspapers, and has made numerous network and cable television appearances promoting the interests of public investors.


Theodore G. Eppenstein

Eppenstein and Eppenstein

767 Third Avenue, 23rd Floor

New York, NY 10017



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Madelaine Eppenstein
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