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Forgery, Conversion, and Theft Cases

  1. What Is Forgery?
  2. What Is Conversion?
  3. What Is Theft?
  4. How Does FINRA Prevent Brokers From Engaging in Conversion or Theft?
  5. What Is FINRA Rule 2150?
  6. What is FINRA Rule 3240?
  7. How Do I Know if My Broker Engaged in Forgery, Conversion, or Theft?
  8. What Should I Do if It Seems My Broker Forged My Signature or Stole My Investments?

What Is Forgery?

Forgery may occur when your broker signs documents for you, without your knowledge or authorization. FINRA has published notices warning investors, brokers, and brokerage firms that forgery has been on the rise in the financial services industry.

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What Is Conversion?

Conversion occurs when a broker converts your lawfully owned investments into investments for their own use without your permission. For example, a broker would be liable for conversion if he transferred investments from your account to his/her own personal account without your permission.

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What Is Theft?

Generally, theft occurs when your broker wrongfully takes control of your investments or holdings without your knowledge or consent.

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How Does FINRA Prevent Brokers From Engaging in Conversion or Theft?

FINRA Rules 2150 and 3240 are crucial in preventing broker misconduct as it relates to conversion or theft.

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What Is FINRA Rule 2150?

Rule 2150 stipulates that a broker must not make improper use of your investment funds, such as taking your investments for his/her own benefit.

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What Is FINRA Rule 3240?

Rule 3240 prohibits brokers from borrowing from or lending to a customer unless an exception applies. The exceptions are outlined in subsection (2)(A)-(E): (A) if you are the broker’s immediate family member; (B) if you are a person or entity that “extends credit in the ordinary course of business” and you are acting “in the course of such business”; (C) both you and your broker are registered representatives of the same member firm; (D) you and your broker have created a lending arrangement based on a “personal relationship”, meaning that the loan at issue could not have been solicited for example; and (E) you and your broker have entered a lending arrangement in a business relationship capacity, “outside of the broker-customer relationship”. If a subsection applies and thus allows your broker to enter a loan agreement with you, you must look to subsection (b). Subsection (b) provides specific requirements for notification and approval. Your broker should be aware of these requirements and ensure that they can satisfy such requirements, before finalizing a loan arrangement with you.

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How Do I Know if My Broker Engaged in Forgery, Conversion, or Theft?

Have you noticed investments missing from your portfolio? Have you noticed investments in your portfolio that you did not authorize your broker to purchase? If so, there may be evidence that your broker undertook one of the above-mentioned violations of law.

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What Should I Do if It Seems My Broker Forged My Signature or Stole My Investments?

If you answered, “yes” or “maybe” to any of the previous questions, it is highly recommended that you consult with an experienced Securities Fraud lawyer, like the ones with Malecki Law, to determine the merits of your case and to verify that your losses are recoverable.

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Testimonials From Former Clients
I highly recommend Jenice and her team at Malecki Law. I had a challenging, and lengthly case. Jenice was professional, very knowledgeable, and a pleasure to work with. She managed to make the process far less stressful during a very difficult time. They care about their clients, and it definitely shows. Mario
Jenice is truly a miracle worker and one of the top securities lawyers. She handled a very difficult case for us, displaying her legal knowledge, intelligence, and savviness throughout the process. I cannot recommend her enough. The quality of work from her team rivals that of corporate law firms. She was always available, extremely professional, and made sure to know all the details of the case. We were very fortunate to have been referred to Jenice and highly recommend her for any securities related legal issues. Nathan A.
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane