New Hampshire 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.

New Hampshire 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 When engaging in financial transactions and investments, individuals rely on the expertise and trustworthiness of their stockbrokers. However, in certain cases, stockbrokers may engage in fraudulent practices or courses of dealing that violate both the Blue Sky Law and their fiduciary duty. Stockbroker churning refers to a deceptive practice where a broker engages in excessive buying or selling of securities within a client's account. This is done with the intention of generating commissions and fees for the broker rather than serving the best interests of the client. Churning can result in substantial financial losses for the client due to the unnecessary transactions and associated fees incurred. In the state of New Hampshire, there are specific legal instructions known as Jury Instruction 4.4.3. This instruction applies to cases involving Rule 10(b) of the Securities Exchange Act of 1934, which prohibits fraudulent practices in the securities market, and Blue Sky Law, which regulates the offering and sale of securities to protect investors from fraud. Under Rule 10(b), individuals are prohibited from engaging in any act or course of business that operates as a fraud or deceit upon any person in connection with the purchase or sale of any security. This broad provision encompasses various deceptive practices, including stockbroker churning. Within the context of this jury instruction, a violation of Rule 10(b) occurs when a stockbroker engages in churning with the intent to defraud or deceive their clients. By conducting excessive and unnecessary trades, the stockbroker manipulates the client's account to generate commissions and fees, causing financial harm to the client. Furthermore, a breach of fiduciary duty is another critical aspect of this instruction. Stockbrokers owe a fiduciary duty to their clients, requiring them to act in the best interests of the client and avoid any conflicts of interest. Engaging in churning violates this duty as it prioritizes the broker's financial gains over the client's well-being. It is worth noting that there might be different forms of stockbroker churning violations and breaches of fiduciary duty within the New Hampshire jurisdiction. While the general concept remains the same, the specific circumstances and details of each case may vary. These variations can impact the legal proceedings, evidence required, and potential remedies available. In conclusion, New Hampshire Jury Instruction 4.4.3 addresses cases involving stockbroker churning, which is a fraudulent practice that violates both Rule 10(b) of the Securities Exchange Act of 1934 and the Blue Sky Law. By engaging in excessive trading to generate commissions and fees, stockbrokers breach their fiduciary duty and place their clients at substantial financial risk. It is essential for individuals to understand their rights and seek legal recourse if they believe they have been victimized by such fraudulent practices.