Bad Advice from a Broker: How to Recover Compensation

As an investor, you need to be able to trust your stockbroker to make responsible investment recommendations that will help you further your goals as described in your investment portfolio.

But when your broker fails you and you suffer exceptionally high losses, you may be able to recover compensation through a number of different avenues. Below, we review some of the most common ways that you can obtain repayment for the financial losses you endured.

FINRA Arbitration

When you want to avoid bringing your case to court, pursuing FINRA arbitration could be the right choice for you. Not only is arbitration far less expensive than litigation, but is also the best way to expedite the recovery of your losses.

For damages in excess of $100,000, you can expect that your case will be heard by a panel of three arbitrators who will review the evidence presented by both parties before making a decision as to whether you are entitled to reimbursement for your damages.

SIPC Coverage

The Securities Investor Protection Corporation (SIPC) provides protections to investors whose brokers or brokerage firms become insolvent or unable to make good on their promissory notes.

For investors to obtain repayment through the SIPC, their stockbroker or firm must be a member of the SIPC. Once a brokerage firm becomes insolvent, the United States Securities and Exchange Commission (SEC) will more than likely pull their registration, meaning their SIPC membership will only be valid for the following 180 days.

However, if you report the details of your losses to the SEC, they usually can refrain from deregistering a broker until you are able to recover your damages.  

SEC and FINRA Restitution

The SEC and FINRA both regulate the conduct of brokers and brokerage firms. As such, they both have the authorization to take enforceable action against fraudsters, including distributing the restitution you’re entitled to.

If you are interested in reviewing possible SEC actions, you can visit their website and file a request for distribution of your restitution. FINRA enforcement actions will often be administered by FINRA staff, and investors can expect to be notified of their right to recovery of compensation prior to an award being issued.

To further discuss possible enforcement actions imposed by FINRA or the SEC, learn how much you may be entitled to recover, or determine whether you have the opportunity to obtain repayment of your stock losses, reach out to a reputable stockbroker misconduct lawyer at your earliest convenience.

Get Help from a Respected Stockbroker Misconduct Attorney

If you are interested in achieving maximum remuneration for the financial damages you’ve suffered, the highly trained attorneys at Meissner Associates can help.

We’ll work to build a case against the reckless stockbroker in charge of your accounts so that you can be repaid for your stock losses. You can contact our office by calling 212-764-3100 or through the contact form at the bottom of this page to schedule your free case evaluation today.