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Stock fraud takes advantage of the trust a consumer places in a broker or brokerage firm. Stock fraud occurs when a broker manipulates customers into trading stocks without regard for the customer's interests. Stock fraud can be orchestrated at the company level, or can be committed by a single employee; stock fraud can also range in size financially from multi-million dollar deals to penny stocks, but stock fraud consistently involves intentional disregard for the financial situation of customers and obsession with personal gain. An attorney experienced in defending the rights of stock fraud victims and recovering funds stolen from them may be able to help guide you through your legal rights and advise you on the most appropriate course of legal action. The Following Activities are Considered Stock Fraud When Done Intentionally: Giving biased investment advice Giving unfounded advice Offering separate clients contradicting advice Advising clients to continue an imprudent risk Advising out of a conflict of interest Protecting Yourself Against Stock Investment Fraud There are many ways in which you can protect yourself from fraud before it occurs. One way is to make sure you are closely monitoring transactions and commissions in your account. Another way to help safeguard your account is to keep it from becoming too concentrated in any one stock position. As a general rule, no one stock position should represent more than 2% of your total portfolio. You don't want another Enron on your hands! Securities Exchange Act of 1934 (partial) Federal securities fraud under Section 10(b) of the Securities Exchange Act of 1934 is defined as "(1) material misstatements or omissions, (2) indicating an intent to deceive or defraud, (3) in connection with the purchase or sale of a security." Brown v. E.F. Hutton Group, Inc. , 991 F.2d 1020 (2nd Cir. 1993). An unsuitability claim is a subset of 10(b) securities fraud with the following elements to be proved: "(1) that the sec