Securities Arbitration & Investment Fraud old
Securities arbitration is how most disputes between investors and their brokers/brokerage firms are resolved. We represent individual and institutional investors in such proceedings across the country and globally.
Securities arbitration affords customers considerable advantages. The process is considerably more expeditious, less costly, and less burdensome than court litigation. Though arbitration is often perceived to be an informal process, securities arbitrations are actually highly specialized proceedings. Our attorneys use their knowledge, creativity, and experience to devise an individually-tailored approach to each client’s case as a way to maximize each client’s opportunity to recover his/her losses.
Investor disputes concerning investment losses for accounts held with brokerage firms are resolved through a forum established by the securities industry known as the Financial Industry Regulatory Authority (FINRA). FINRA was formed on August 6, 2007, to combine the regulatory efforts of the New York Stock Exchange (NYSE) and National Association of Securities Dealers (NASD). FINRA is charged with the responsibility to resolve disputes between public investors, member firms and firm employees. FINRA is subject to oversight by the Securities Exchange Commission (SEC). FINRA establishes rules and regulations for the standards of care required for the handling of customer accounts. These rules and regulations are promulgated by the Code of Conduct which each member firm is required to comply with as a condition of membership. Failure to comply with the FINRA Rules of Conduct can result in sanctions and penalties.
Investor disputes concerning investment losses for accounts managed by Registered Investment Advisors (RIA) are resolved through forums specified and consented to in the Investment Advisory Agreement between investor and the RIA. RIAs are supervised either by state regulators or the SEC depending on the total amount of combined client assets under management.
As members of FINRA, brokerage firms and stockbrokers are required to submit to binding arbitration as a way of resolving customer disputes. The FINRA arbitration dispute resolution process is designed to protect investors from stockbroker misconduct, or other sales practice violations, which results in investment losses. A brokerage firm’s failure to comply with FINRA rules and regulations concerning stockbroker misconduct can result in a claim for damages to recover investment losses.
There are certain activities in an investor’s account which are not suitable for most investors and should be considered as potential warning signs that require closer attention to your investment account including:
- Excessive trading (churning) resulting in excessive commissions
- Misrepresentation or Omissions of Material Facts in a Prospectus, or by a financial advisor
- Failure to properly register with the SEC or FINRA
- Dramatic change in your portfolio composition
- Advisor pressures you to act immediately to a recommendation
- Securities concentration into a single security or investment product
- Large purchases of securities on margin
- A transaction history of selling winners and holding losers
- Mutual fund switching between different mutual fund families
- Variable annuity switching between different variable annuity contracts
- Large amounts of life insurance or variable universal life insurance as a “retirement” plan
- Customer denied access to branch manager
- Account underperformance relative to the stock market
- Guarantee of investment returns and guarantees against investment losses
- Alternative or proprietary investments which fail to perform as designed or as marketed
- Speculative options trading
- False or exaggerated credentials..