The law imposes a duty upon securities brokers and investment advisors to only to recommend securities that the they reasonably believe are suitable for the client. The broker's belief must be based upon a reasonable inquiry of the client's investment objectives, financial situation, tax status and any other relevant information known by the broker.
Failure to Execute Orders
Financial advisors and securities brokers have a duty to properly execute client orders. The broker also has a duty to obtain the best price available for the customer. If the customer places an order to sell a security if the price declines to a certain level, the broker is obligated to do so. Failure to meet these obligations results in liability for any resulting losses.