What are things the broker need not to do to the client?

There are obvious things a broker should avoid: lying, misrepresenting, and hard-sell tactics. However, some unethical behavior is more subtle but no more acceptable.

Can stock brokers steal your money?

Can a Stock Broker Steal Your Money? A broker cannot legally steal your money, just the same as your neighbor or your bank cannot legally steal your money. However, it is possible for a stockbroker to steal your money and the money from other investors. This is called Conversion of Funds.

Why do stock brokers shout?

For a trader to yell, it is pretty common in the trading pits which existed before the trades were executed electronically. Imagine how 2 people would negotiate for your company’s stock in a room where there are 100 or more traders trying to trade for themselves using the same technique. A Market. that’s what it is.

Why do brokers push certain stocks?

Several firms admit they have an incentive to prod clients into leveraging up their portfolios with borrowed money. Such margin debt amplifies investors’ exposure to the markets, raising the total amount upon which the firms can charge fees. The borrowings also magnify the risk investors may lose money.

What is an unethical act performed by stock brokers?

Another serious type of unethical behavior is selling away. This is when a broker tries to convince you to buy stocks privately, not using his brokerage firm. This occurs most often with private investments – stocks that are not registered with the securities exchange commission or traded publicly.

Why do stock brokers wear blue jackets?

Following counterculture of the 1960s, they became brightly colored and distinctive to assist in the identification of specific traders or the exchange members for whom they work. Today, trading jackets are mostly anachronistic as open outcry exchanges have been displaced by electronic trading platforms.