At all times, your broker is obligated to obey the instructions you give him regarding all aspects of your investment account. Even if you have a discretionary account in which you have given the broker authority to trade without obtaining your approval beforehand, this duty still applies.

If you instructed your broker to buy or sell a stock or mutual fund and he failed to do so in a timely fashion, or he told you he would execute the trade, but did not, he is liable to you for not following your directions. This is especially true if there is an increase or decrease in the price of the security you wanted to buy or sell. You may recover damages for not realizing a gain or by incurring a loss resulting from his negligence.

Another example of this type of broker misconduct occurs when your broker resists your instructions to sell a particular stock. Rather than doing what you asked, the broker may -- solely for his or the firm's own benefit -- pressure you to keep the security in your account. By improperly persuading you to change your original instructions, the broker may be liable for any losses you suffer as a result of retaining the stock.

A broker who resists your instructions to stop using margin in your account may also be liable for damages, particularly if your portfolio declines in value because of the continued margin trading. Your broker must likewise put into practice any investment or trading strategy you instruct him to implement in your account. In other words, if you instruct your broker to buy only triple-A rated municipal bonds or government bonds paying a certain interest rate, he must not disregard your directions and buy corporate debentures instead.