Legal Question in Investment Law in Colorado

Who is responsible for illegal disbursement of brokerage funds.

We are joint owners of a brokerage account with 2 other people. One of these people sold the stock, had the firm issue a check and then took the check to another institution and had it processed. The check then cleared the brokerage firms clearing house with out the proper signatures. Who is responsible for the damages? Is it the brokerage house, or the institution that processed the check?

Asked on 11/28/01, 9:49 pm

1 Answer from Attorneys

Louise Aron Attorney at Law

Check from brokerage house

Louise Aron

Attorney at Law

Lakewood Office:

1536 South Ingalls

Lakewood, Colorado 80232 USA

(303) 922 7687

fax (303) 922-1370

Cherry Creek Office:

300 South Jackson #100

Denver, Colorado 80209 USA

(303) 780-7339

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DTC - 4610 South Ulster, #150

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LawGuru User

Dear LawGuru User:

I would need to examine the documents signed when opening the brokerage account to determine whether or not issuance of the check by the broker was improper. Joint ownership has many different meanings. Accounts may permit any joint owner to withdraw funds, or they may require all joint owners' signatures to withdraw funds.

If signatures on the check were forged, and if the check was deposited or cashed, then the bank or banks which negotiated (accepted) the check may have liability.

Thank you for using LawGuru.


Louise Aron

Attorney at Law

My web site

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Answered on 11/29/01, 12:46 pm

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