Mississippi Jury Instruction - 4.4.3 Rule 10(b) - 5(c) Fraudulent Practice or Course of Dealing Stockbroker Churning - Violation of Blue Sky Law and Breach of Fiduciary Duty

• Category: Federal - Jury Instructions
• State: Multi-State
• Control #: US-11CF-4-4-3
• Format: Word; Rich Text

Description

This form contains sample jury instructions, to be used across the United States. These questions are to be used only as a model, and should be altered to more perfectly fit your own cause of action needs.

Mississippi Jury Instruction — 4.4.3 Rule 1BCC©c) Fraudulent Practice or Course of Dealing Stockbroker Churning — Violation of Blue Sky Law and Breach of Fiduciary Duty: Mississippi Jury Instruction 4.4.3 addresses cases involving fraudulent practices or courses of dealing by stockbrokers, specifically related to churning. Churning refers to the frequent buying and selling of securities in a customer's account, primarily for the purpose of generating commissions, rather than based on the customer's investment objectives. In these cases, the stockbroker engages in a fraudulent practice that violates Rule 10(b) — 5(c) of the Securities Exchange Act of 1934, which makes it unlawful for any person to engage in fraudulent practices or courses of dealing in connection with the purchase or sale of securities. This rule prohibits deceptive practices such as making false statements or omitting material facts that could mislead investors. The violation of Blue Sky laws is an additional aspect of this jury instruction. Blue Sky laws are state regulations that govern the offering and sale of securities within a particular state. When a stockbroker engages in churning, it often violates these state laws meant to protect investors from fraudulent activities. Furthermore, this instruction encompasses the breach of fiduciary duty by the stockbroker. A fiduciary duty is an obligation requiring the stockbroker to act in the best interest of the client. However, when churning occurs, the stockbroker prioritizes their own financial gain over the client's best interest, breaching their fiduciary duty. Different types or instances of this jury instruction may involve varying degrees of churning and fraudulent practices. Some cases may involve blatant and intentional churning, where the stockbroker clearly prioritizes commissions over client interests. Others may involve more subtle forms of churning, where the broker excessively trades on behalf of the client, solely for commission generation, without considering the suitability or needs of the investor. In conclusion, Mississippi Jury Instruction — 4.4.3 Rule 10(b)-5(c) addresses cases involving stockbroker churning, fraudulent practices, violation of Blue Sky laws, and breach of fiduciary duty. These instructions help to ensure that investors are protected from manipulative practices in the securities market and serve as a guide for determining liability and potential damages in such cases.