Unsuitable Investment Recommendations

A broker has a legal obligation to make recommendations that are consistent with the client's risk tolerance, needs, and investment objectives.  Thus, the broker has a duty to learn about each client’s personal financial condition and goals and to recommend investments and trading strategies suitable for that individual.  An investment may be unsuitable if:

• A client lacks the financial ability to incur the risk associated with a particular investment.
• The investment was not in line with that client's financial needs.
• The client did not know or understand the risks associated with certain investments.