If you have fallen victim to stockbroker fraudsters, you know how bad it is. Therefore, it is essential to find ways of detecting and preventing possible stockbroker fraud cases before they occur.

Consequently, you can foresee unethical behavior or potential fraud before it happens and talk to a stock loss attorney in time.

Here are some of the steps you can undertake to avoid becoming a victim.

  1. Do a background check of the broker.

It is always important to find out more about a broker before you start working with them. The best thing to do is finding out who they are and what past similar tasks they have handled. Also, find out what their success record has been in the past.

The easiest way to access information about a broker is by checking out an online database. You will get access to what the complaint clients have presented and the actions they took to resolve them.

  1. Complete and review new account forms

When entering into a deal with a broker, you are required to fill the investor’s new account forms. While doing that, you need to ensure that you fill accurate and valid information into the forms. Also, ensure that you don’t allow anyone else to fill them on your behalf.

These forms are necessary because they help you get compensated if the broker recommends a poor investment to you. Therefore, if you later realize that the investment was unsuitable for you, you can file a claim in court and get compensated.

  1. Review account statements and trade confirmations

Some brokers charge you expensively for things you would have paid a lower price. Also, some engage in unauthorized trading that may later have negative implications.

The inceptor should collect all information regarding transactions and avoid relying on the broker for such information. You can use bank statements and other tangible confirmations.

  1. Know how vital a happiness letter is

You are likely to receive a happiness letter if your account shows some questionable activity. Therefore, it is essential to understand the purpose of the letter and take the necessary action.

Most firms will encourage you to visit a bank manager and assess the situation and find a way out. There may be some activity that does not match your profile, and that needs to get resolved immediately.

The branch manager will make changes to correct the problems. You should also talk to an investment lawyer to see how they may help.

  1. Address questionable activity immediately.

It is necessary to address all issues regarding your account promptly. If you delay for any reason, you will find it difficult to file a claim later.

Once you present your claims to the branch manager on time, they will address the issues as soon as possible. It is always advisable to do all this in writing.


Stockbroker fraud has become rampant for some time, but now there are steps to help you detect and prevent it. As an investor, these steps will be beneficial in securing your investment and bringing in returns.