Have You Suffered Investment Losses Due To The Bad Advice Of A Broker or Financial Advisor?
Our Securities Lawyers Help Investors Recover Losses through FINRA Arbitration
Every day, investors lose their hard-earned money to faulty advice provided by brokerage firms, broker-dealers or financial advisors.
While many investment losses are simply market related, in some cases these losses can be attributed to a financial advisor’s wish to generate commissions, failure to disclose the risks associated with an investment or error in evaluating which investments are suitable for each particular investor.
When an investor loses money, securities or other damages due to broker or financial advisor misconduct, that investor is entitled to recover those damages.
The Financial Industry Regulatory Authority (FINRA) regulates securities firms doing business within the United States, with the mission to protect investors by enforcing fair and honest operations in the U.S. securities industry.
When brokerage firms, broker-dealers, financial advisors or representatives breach their fiduciary duty to properly represent investments, disclose risks, supervise their brokers or otherwise violate FINRA rules and regulations or federal securities laws, investors have a claim to recover damages through the process of FINRA arbitration.
If you feel that you have suffered financial loss due to a broker or financial advisor’s negligence, fraud or other misconduct, our Herskovits PLLC FINRA arbitration attorneys can help recover your losses through the FINRA arbitration process. Filing an arbitration claim through is quicker and less formal than filing a lawsuit in the court system.
Financial Advisor or Broker Actions in Violation of FINRA Rules
Common types of broker and financial advisor misconduct include:
- Breach of contract: violation of the terms of the written customer agreement outlining the legal obligations of the broker or advisor;
- Breach of fiduciary duty: financial advisor puts their own financial interest over the best interests of their client;
- Churning: encouraging a client to participate in excessive or unnecessary trades to generate fees or commissions;
- Failure to disclose risk: failing to inform a client of the risk of an investment and potential for financial loss;
- Failure to supervise: brokerage firm fails to properly supervise its brokers, advisors or representatives thereby allowing misconduct to occur;
- High pressure sales: implementing aggressive sales tactics or pressuring a client to rush investment decisions;
- Misrepresentation: presenting untruths about an investment regarding level of risk or other data characterizing the investment;
- Negligence: failing to handle an investor’s account in a reasonably prudent manner or failing to comply with industry rules or regulations;
- Unauthorized trading: failing to obtain a client’s consent before trading on the client’s account;
- Unsuitability: recommending that an investor invest in a product that does not conform to the client’s level of risk tolerance.
What is the FINRA Arbitration Process?
Investor claims against broker-dealers (investment brokerages), investment advisors and other industry professionals are filed with the Financial Industry Regulatory Authority (FINRA).
FINRA arbitration is less formal and proceeds much quicker than filing a lawsuit in court, and decisions are final with only rare instances of appeal allowed.
Step 1: Statement of Claim
As your FINRA arbitration attorney we prepare a “Statement of Claim” outlining the activity of the broker or advisor that led to your financial loss. The financial institution then has 45 days to file an answer to this Statement of Claim.
Step 2: Panel Selection
Both parties must agree to the selection of the FINRA arbitrators who will preside over the arbitration proceedings. If the dispute involves over $100,000 in damages, three arbitrators will be selected for the panel. For claims involving $50,000 to $100,000 in damages, one arbitrator will be chosen. For claims involving less than $50,000, FINRA will adjudicate the claim based on your attorney’s legal briefs alone.
Step 3: Discovery
Your FINRA arbitration attorney may request related documents from the brokerage firm. The investor should be able to produce account statements, receipts, correspondence and other documents related to the case. Depositions and other forms of discovery are typically not allowed in FINRA arbitration.
Step 4: Hearing
If the dispute involves more than $50,000 in damages, your FINRA arbitration attorney will attend a hearing before the chosen panel of FINRA arbitrators. Arbitration consists of an opening statement, evidence presentation, witness questioning, cross-examination and closing statements. The FINRA arbitration panel will then issue a decision within 30 days. Appeals are rare and only granted for clear error of law or fact on the part of the panel.
The entire process of FINRA arbitration is often completed within 12-18 months after the Statement of Claim is filed.
As arbitration decisions are final and appeals are rare, it is vital that you chose a law firm with deep experience and expertise in the intricacies of the securities business, the laws that govern investment advisors, and in the complex FINRA arbitration procedural rules and guidelines.
There are Time Limits to Make Your Claim so Act Quickly to Preserve Your Rights
FINRA arbitration veteran Robert Herskovits has handled over 200 FINRA arbitrations. As experienced FINRA lawyers, the Herskovits PLLC team has taken on many of the nation’s leading financial institutions and recovered millions for investors through FINRA arbitration.
If you have investment losses in excess of $500,000 and believe those losses are related to broker or financial advisor or broker-dealer misconduct, learn your options for FINRA arbitration today with a no-cost and confidential consultation with a Herksovits PLLC securities lawyer: 212.897.5410 or Report Online