Nebraska 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.

Nebraska 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 is a legal instruction that outlines the elements required to establish a fraudulent practice or course of dealing by a stockbroker. This instruction is relevant in cases where a stockbroker engages in excessive trading or churning of investments, thereby violating the Blue Sky Law and breaching their fiduciary duty towards their clients. Churning refers to a practice where a stockbroker excessively buys and sells securities on behalf of a client, either to generate commissions or increase their own profits, without considering the client's best interests. This fraudulent practice can result in substantial financial losses for the client. To hold a stockbroker accountable for churning, certain elements must be proven, as described in Nebraska Jury Instruction — 4.4.3 Rule 10(b— - 5(c). The different types of Nebraska 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 may include: 1. Fraudulent Practice: This refers to any intentional act committed by a stockbroker with the intent to defraud their client or manipulate the securities market. This can involve misrepresenting investment opportunities, providing false information, or engaging in deceptive practices to lure investors into fraudulent schemes. 2. Course of Dealing: This implies a pattern of conduct by the stockbroker that demonstrates a consistent and systematic practice of churning client accounts, disregarding the client's interests, and prioritizing their own financial gain. It establishes a repetitive behavior that supports the claim of fraudulent practice and breach of fiduciary duty. 3. Stockbroker Churning: Stockbroker churning specifically involves excessive trading of securities within a client's portfolio, irrespective of their investment objectives or risk tolerance. This type of churning often leads to substantial transaction costs and a dilution of the client's portfolio value. It is a violation of the stockbroker's duty to act in the client's best interest. 4. Violation of Blue Sky Law: Blue Sky Laws are state regulations that aim to protect investors from fraudulent securities practices. In this context, a violation of Blue Sky Law can occur when a stockbroker engages in deceptive or manipulative activities with respect to securities transactions, thereby defrauding their clients. 5. Breach of Fiduciary Duty: Stockbrokers owe their clients a fiduciary duty, requiring them to act in the best interests of the client. When a stockbroker engages in churning or other fraudulent practices, it represents a breach of this fiduciary duty, as they prioritize their own financial gain over the client's welfare. Nebraska Jury Instruction — 4.4.3 Rule 10(b— - 5(c) provides a framework for attorneys and judges to guide the jury in understanding the legal elements necessary to establish a claim of fraudulent practice or course of dealing by a stockbroker involving churning, violation of Blue Sky Law, and breach of fiduciary duty.