As an investor, when you’ve suffered significant losses and you believe the irresponsible or negligent actions of your broker are the cause, work with an experienced stock loss attorney who can help you obtain the restitution you’re entitled to.
When you have been wronged by a stockbroker or your brokerage firm, you will need to pursue arbitration through the Financial Industry Regulation Authority (FINRA). This way, you will be able to maximize the amount that you are able to recover from the fraudulent stockbroker in question as per the FINRA obligations that brokers must uphold.
Investors should be able to trust their financial advisors and firms to always act in their best interests, and when they fail to do so, investors have the right to seek remuneration for their damages. Speak with your stock loss lawyer at Meissner Associates, who is dedicated to helping those who have endured substantial losses due to financial planning misconduct in every form.
Examples of Stock Market Fraud
Before you can determine whether you have a case against your broker or financial advising company, you will need to understand exactly what constitutes stock market fraud.
This is because investors take a risk in every investment opportunity they pursue, and simply losing out on your investment isn’t necessarily grounds for FINRA arbitration or mediation. Below, we discuss the most common types of brokerage misconduct so that you will have a better idea as to the validity of your potential claim.
In some stock loss scenarios, negligence of a stockbroker is the reason why you’ve lost out on your investment. Although more difficult to prove, being able to do so can result in recovery of your damages. Some examples of broker negligence include negligent execution of trades, failure to supervise, and improper securities selection.
Possibly one of the easiest allegations to prove is that of excessive trading, also known as churning. Here, the stockbroker in charge of your investments is being accused of trading your accounts in excessive amounts.
Your commission-based relationship with your stockbroker allows them to make money while your returns are only reduced over a period of time. If your accounts have been traded in excess of four times over a period of a year, you can reasonably expect to move forward with your stock loss case.
An unsuitability allegation means that you are accusing your broker of knowingly engaging in trades that were inconsistent with your goals—or you may be arguing that your broker should have recognized that these trades would not meet your objectives as an investor.
If you’ve lost out on investments exceeding $100,000, Meissner Associates can help establish that your time horizon and risk tolerance did not match up with the trades your broker executed.
Other Types of Broker Misconduct
There are many different ways that your stockbroker’s misconduct could have resulted in your financial losses in addition to the ones we have described above. Other examples of broker misconduct could include:
- Unauthorized Trading – When your stockbroker makes trades without your knowledge or consent and you lose out on your return, they have engaged in unauthorized trading practices, a FINRA violation.
- Selling Away – If you have been sold a security that the brokerage firm that employs your broker does not hold or otherwise offer, your stockbroker has been inappropriately selling away. These practices place your investment at a significantly increased risk over securities offered by the brokerage firm.
- Excessive Use of Margin – Buying on margin occurs when your broker and brokerage firm encourage you to take out loans from the brokerage firm. You can typically use this money to invest in other securities, but when your loan remains outstanding and you continue to invest, your broker will make more money. If your broker fails to explain the risk you’ve taken, excessive use of margin applies and your broker can be held accountable.
Understanding the stock market, brokers, and brokerage firms can be quite complicated for someone who doesn’t have training or experience in these fields, and when you suspect that your astronomical stock losses were caused by the misconduct of your financial planner, you can take legal action against them to hold them accountable for their unscrupulous actions.
Your FINRA Arbitration Claim
A FINRA arbitration claim is an alternative to bringing your case to court. This will expedite the amount of time that it takes to resolve your case and be far less expensive than if we were to pursue litigation. The arbitrator is essentially a mediator who will make a decision regarding the outcome of your case. When we win, you’ll be issued an award that is legal and binding.
Once we proceed with arbitration, we will not have the option of bringing your case to court. Depending on the complexity of your case, we will either be assigned a single arbitrator or a panel that consist of three arbitrators to hear your case.
Similar to court proceedings, we will present our arguments as to the validity of your stock losses and provide evidence to support the claim, and then the arbitrator or panel will review the given testimony to come to a decision.
It is important to note that it can take a significant amount of time for arbitration to be resolved, as losses in excess of $100,000 will necessitate a panel of arbitrators and an in-person hearing. It can often take more than a year for an award to be issued. If you have further questions about what you can expect in your FINRA hearing, reach out to your stock loss attorney at Meissner Associates today.
Stock Loss FAQ
You may have understood some of the risk of investing when you signed on to work with your stockbroker and brokerage firm, but chances are you were not prepared to be swindled by money-hungry financial advisors. Most investors have zero experience in FINRA arbitration claims, leaving them confused about what to expect as they move forward with their hearing.
For this reason, below we have addressed some of the most frequently asked questions our clients have had regarding stock loss and broker misconduct. If your concerns have not been answered on this page, you can discuss your questions with your attorney during your free consultation.
What is the SIPC?
The acronym SIPC refers to the Securities Investor Protection Corporation, which was designed to cover investors’ brokerage accounts should the brokerage firm become insolvent, or unable to repay money owed to investors.
The SIPC also protects investors who are victims of stockbroker and brokerage firm misconduct, including theft and unauthorized trading, among other types of fraud. The vast majority of brokers and firm are members of the SIPC and are also registered with the U.S. Securities and Exchange Commission (SEC).
If a broker is not registered with either company, they are obligated to inform their investors. Only those investors who have been wronged by an SIPC member will be covered under the coverage regulations, and those investors whose financial planners become unregistered by the SEC will only be protected for the first 180 days following the termination of their broker’s SEC registration.
If the SEC knows that a broker or brokerage firm engaged in securities violations or owes an investor money, they will likely refrain from pulling the broker-dealer registration. However, the sooner you report your stock losses to your attorney, the better your chances of recovering your investment through the SIPC will be.
How long do I have to bring my lawsuit to court?
FINRA regulations allow for an arbitration claim to be filed within six years from the date that the stockbroker misconduct occurred or from the date of your loss.
However, there are certain time restrictions that the defense may use to infringe on your case. Your attorney will be aware of these statutes of limitations and will do everything possible to keep the culpable party from taking advantage of you in your attempt to secure your investment losses.
What is a reasonable amount I can expect to recover?
There are many details that go into the calculation of your total losses, and once we are able to thoroughly review the circumstances of your stockbroker’s misconduct, we will have a better understanding of how much recovery you’ll be entitled to.
Reach Out to a Regarded Stock Loss Attorney
At Meissner Associates, we are committed to helping those who have been mistreated by financial advisors they trusted to help increase their profits through investing.
If you believe that your substantial stock market losses were caused by the negligent or reckless actions of your stockbroker or brokerage firm, schedule your free claim review today with a stock loss lawyer. You can do so by completing the quick contact form we have included at the bottom of this page or by giving our office a call at 212-764-3100.
Meissner Associates, Attorneys At Law
Description: FINRA had sent me several series of questions to answer for 8 months. I email them a 6 page response and FINRA requested more questions within 20 minutes. It was never ending. I was unsure of the phrases used or what they wanted in my response. My evenings and weekends where consumed with worry and writing responses to events 11 months ago. Stuart, returned my phone call, and followed up. He helped me limit superfluous information and zero in on the questions being asked. This was fairly settled and closed. My life is back to helping my clients.
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