Overconcentration

Overconcentration of an investment account can be defined as the opposite of diversification. When handling the investment account of a client, a stockbroker should strictly adhere to the principle of “not putting all your eggs in one basket,” that is, never put a substantial percentage of the money in your account into one investment vehicle only. Common sense will show you that if you put most of your money into a few assets, your portfolio risk will increase drastically. Some examples of overconcentration are:

  • Purchasing/selling short too much stock of the same company (or of companies in the same industry)
  • Investing a substantial part of the money in your account into one mutual fund (or several mutual funds in the same industry)
  • Investing a substantial part of the money in your account into high-yield (junk) bonds

Overconcentration of a portfolio, if carried out without the explicit authorization of the investor, constitutes one type of securities fraud. If you think you have been the victim of a stockbroker who overconcentrated your account, you might need an experienced securities arbitration attorney.

Schedule A Free Initial Consultation Today

If you are facing a legal dispute related to your investments, it is in your interest to work with an experienced attorney who can provide you with the advice you need to reach a resolution that reflects your interests. The first step is to meet with a lawyer so you can learn more about your legal options.

To schedule an appointment with an attorney at Berg Law LLC, call us at 504-526-2921 or contact us online. From our office in New Orleans, we serve clients throughout Louisiana and beyond.

Schedule A Free Initial Consultation Today

If you are facing a legal dispute related to your investments or your commercial interests, it’s in your interest to work with an experienced attorney who can provide you with the advice you need to reach a resolution that reflects your interests. The first step is to meet with a lawyer in person so you can learn more about your legal options.

Contact Us Today

To schedule an appointment with an attorney at Berg Law, LLC, call us at 504-526-2921 or contact us online. From our office in New Orleans, we serve clients throughout Louisiana and beyond.