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Misrepresentations. False
statements. Incompetence by stock brokers and financial planners. Investor
fraud and broker misconduct are more common than you may think. The U.S. is
experiencing an epidemic of fraud among corporate and financial executives,
and large investment firms. Loosely translated, securities fraud is
stealing, and federal officials estimate that investment fraud costs U.S.
taxpayers billions of dollars each year.
Backed by experience, our lawyers aggressively pursue arbitration between
consumers and broker-dealers (e.g., stock brokers, investment advisors or
financial planners).
Contact us immediately if you suffer loss of
your savings due to one of the following common forms of stock broker fraud
or misconduct, because you may have a right to recover losses:
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- Churning or excessive trading: Excessive trading in a customer's
account to give profit to the broker/dealer in disregard of the customer's
best interests. Prosecutable under the 1934 Securities Exchange Act.
- Unsuitable investments:
Investments
that ask the client to assume a greater financial risk than he or she can
reasonably sustain; investments that are inconsistent with the clients
financial needs; or investments in which the client is not adequately made
aware of the risks involved.
Insider trading: Illegal insider trading refers generally to buying
or selling a security, in breach of a fiduciary duty or other relationship of
trust and confidence, while in possession of material, nonpublic information
about the security. Insider trading violations may also include "tipping" such
information, securities trading by the person "tipped," and securities trading
by those who misappropriate such information.
Misrepresentation and false statements: Disguises
risk factors associated with that particular stock; the broker intentionally
misleads the customer about material facts regarding the stock.
Unauthorized trades: Unless the client of a brokerage firm has
signed a contract that allows his or her broker to engage in discretionary
trading, each transaction performed by the broker must be done with the
client's permission.
Breach of fiduciary duty: A breach of fiduciary duty includes,
among other things, abdication of duty, abuse of trust and approval of
unlawful transactions, and may be based on nonfeasance as well as misfeasance.
Overconcentration: Diversification is one of the most important
rules of investing. Brokers should never concentrate all of a client's
investments in one area. The broker who does so is potentially liable if that
investment declines in value.
If
you have been victimized by stock fraud, you may be eligible for compensation as
well as damages through legal action. Where there is a choice between
arbitration and a lawsuit, arbitration can have significant advantages.
Simplified procedures, such as the lack of formal pleading rules, the absence of
most pretrial motions, and simplified discovery can substantially reduce the
cost of obtaining a decision.
Most brokerage firms now require their customers to sign arbitration
agreements when they open an account. These agreements are generally
enforceable, so if you have signed one, you probably don't have a choice and
will be required to arbitrate your claims even though, for technical reasons,
sometimes a lawyer will choose to file your case in court first before it is
ordered to arbitration. If there is no arbitration agreement, and your claims
are against a stockbroker, the rules of the National Association of Securities
Dealers and applicable law give you a choice between arbitration and court.
Most arbitrations are conducted by the National Association of Securities
Dealers, Inc. (NASD) and the New York Stock Exchange (NYSE). There is little
difference between the two, but an attorney can help you decide which scenario
works more to your advantage.
The arbitration process can take from six months to a year from the time of
filing to completion, and consists of the following phases:
- A Statement of Claim
is filed with the NASD or the NYSE, setting forth the claims one (the
Claimant) has against the broker and/or brokerage firm (the Respondents).
- A response, provided
by the broker and/or firm.
Discovery, in which
both sides may request documents deemed relevant to the dispute.
The hearing, where
the parties present their respective sides of the dispute to the arbitration
panel. The panel is usually composed of three individuals, two of whom are
public arbitrators not affiliated with the securities industry and one who is
affiliated.
Determination by the
panel whether the Claimant should be reimbursed for the losses sustained
and/or recover additional damages.
If you have been victimized by stock fraud, please
contact us online or call 800-434-8399. We can review your case and determine
the course of action that will assure that you are compensated for the damages
that you have suffered.
 Click Here for Frequently Asked Questions About Stock Fraud
Complete Our Online Stock
Fraud Case Evaluation Form
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