Get Legal Help from a Broker Fraud Lawyer With a Reputation for Recovery.
Our broker fraud lawyers are all too familiar with this pervasive problem that affects investors from all walks of life and can ruin retirement incomes and other savings goals. Brokerages process billions of dollars in investment transactions every day, leaving room for fraud, negligence, and other abuse by dishonest brokers. Regulatory organizations, including the Financial Industry Regulatory Authority (FINRA), the U.S. Securities and Exchange Commission (SEC) and the state and federal governments, investigate complaints of broker and brokerage fraud, which claims many unsuspecting victims every year.
While these agencies investigate complaints and may take actions such as issuing fines and suspending licenses of brokers and firms, aggrieved investors who want to get their money back must typically take action through a FINRA claim or a civil lawsuit.
NOT SURE WHERE TO TURN? OUR BROKER FRAUD LAWYERS CAN HELP.
Why Choose Wolper Law Firm, P.A.? Experience. Knowledge. Success.
If you have seen large and unexplained losses in your investment accounts and believe you have been a victim of misconduct, reach out to our broker fraud lawyers at Wolper Law Firm, P.A. for assistance. We provide free consultations to investors and will listen carefully to your concerns to help you discover if you have lost money due to the actions or inactions of an unscrupulous broker and/or brokerage firm.
You may be able to bring a claim to seek recovery of your money. Call us at 800.931.8452.
WHAT DOES FINRA DO?
FINRA oversees and regulates registered brokers and brokerages in the United States. It also investigates broker and brokerage fraud complaints.
Violators pay fines and face suspension or termination of their registration when violations occur. They may also face criminal prosecution, depending upon all the circumstances. FINRA reports the United States has:
617,549 – Registered brokers and financial advisors
3,435 – Securities firms
79.7 Billion – Market transactions processed every day
FINRA requires brokerage firms to provide customers with written notifications of trade confirmations during or prior to the transactions. Brokerages also must provide account statements so that clients can review transactions and ensure they authorized each one. Unfortunately, many investors do not review their account statements regularly, or at all, so they do not recognize that fraud has occurred until it is too late.
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Occurrences of Broker Fraud in the U.S.
With so many registered brokerages processing billions of dollars in daily transactions, which FINRA refers to as “market events,” there is ample room for broker fraud to occur. In 2020, FINRA reports, it referred for prosecution 970 cases of fraud and insider trading. FINRA says it barred 246 brokers from further trading and suspended 375 others. Also, FINRA expelled 2 firms and suspended 2 others for brokerage fraud and similar violations.
Those receiving FINRA’s wrath for violating the nation’s laws governing broker and brokerage fraud paid $57 million in fines. FINRA ordered another $25.2 million in restitution. Restitution offsets the money defrauded from investors, but often does not get paid in full.
OUR BROKER FRAUD ATTORNEY SEEKS MAXIMUM COMPENSATION FOR INVESTORS
Unfortunately, as the numbers highlight, stockbroker fraud and misconduct happen all too frequently. But as these statistics also show, many brokers get caught and pay the price for their misdeeds, as they should. If you have lost significant money due to a dishonest broker or brokerage firm, you may be able to get restitution by filing a claim for arbitration or mediation through FINRA. While making a claim through FINRA is often the most desirable way for an investor to recover their money, in some situations a civil lawsuit through the court may be a viable option.
Once we learn the unique details of your case, we will advise you about the best option for your circumstances. Our experienced broker fraud attorneys have recovered money for investors in over 99% of claims. Contact us to learn more about how we may be able to help you, too. When brokers fraudulently take the hard-earned dollars of innocent investors, they should be held to account for their actions. We work hard to maximize the value of every case we handle.
BROKER FRAUD FAQS
Broker Fraud Attorneys Answer Common Questions
Here are answers to frequently asked questions about how investors can recover money lost to broker fraud. For answers to your individual questions, reach out to our law firm to schedule a free consultation by calling us at 800.931.8452.
You can file a claim for arbitration or for mediation with FINRA. When a claim goes to arbitration, independent arbitrators selected by the parties involved hear evidence and arguments for both sides–investors and brokers/brokerage firms–and decide the outcome. Depending on the dollar value of the claim, either one or three arbitrators will hear the case and make a decision. Unlike in a civil lawsuit, the decisions in FINRA arbitration are final and cannot be appealed.
Claims may also be resolved through mediation with FINRA. In this process a neutral mediator works to help resolve the claim and help parties reach a settlement. However, mediation through FINRA is voluntary, so both sides in the claim must be willing to go this route.
FINRA does not require investors to have an attorney to file a claim for arbitration. However, because arbitration decisions are final and cannot be appealed, it is highly recommended that investors work with experienced broker fraud attorneys in FINRA arbitration claims. You stand the best chance of getting an award with the help of a lawyer who understands how to identify evidence of securities fraud and prove it to arbitrators. Additionally, the broker and/or brokerage house that you filed the claim against will most definitely have lawyers representing them who are highly skilled in securities law. You will level the playing field by having a broker fraud attorney represent you.
Our attorneys have previous experience defending the brokerage firms that they now hold accountable on behalf of defrauded investors, which provides them comprehensive experience on both sides of these issues. Our broker fraud attorney can also represent your interests if your case goes to mediation instead of arbitration.
Whether you can sue for broker fraud in court depends upon whether you have an arbitration agreement in place with your brokerage firm. Many firms require their clients to sign arbitration agreements restricting them to having disputes resolved through FINRA. When our broker fraud lawyer meets with you in a free consultation, we can review the documentation you signed when you opened the account with your brokerage firm to determine whether you are eligible to file a lawsuit. If you can, we will explain the steps for how to sue a broker or how to sue a brokerage firm, and whether a lawsuit may be more beneficial (or not) in your case than going to arbitration.
The average arbitration case through FINRA takes approximately 16 months from filing a claim to reaching a decision. If the decision goes in your favor, the broker/brokerage firm who committed the fraud will be ordered to pay you compensation within 30 days. If your case can be settled, it usually takes around 12 months. Cases that go to civil court can take much longer to be resolved because of the appeals process. Even if a judge decides in your favor, if the broker and their firm file appeals, it could potentially take years to get recovery of your money.
“Matthew Wolper is the consummate attorney who showcased his knowledge, legal skills and client dedication while representing my interests. His unfaltering attentiveness and expertise were evident from the start, and we’re further displayed throughout our successful lawyer/client relationship. I would not hesitate to highly recommend the Wolper Law Firm, P.A..” – Barton H.
Exercise Diligence to Help Stop Broker Fraud
In many cases, more than one firm services an individual investor’s account. For example, one firm may deal directly with investors, provide advice, and take trade orders, while another firm will execute those trades on the market. Each step in a financial transaction is an opportunity for someone to commit fraud. Unscrupulous firms and their brokers can collude together to steal investors’ money, or they can act alone. But they all depend on concealing their actions.
The diligent investor is the enemy of the fraudulent broker. Careful recordkeeping is the best protection against fraud.
Investors should obtain statements from all firms that service their accounts and read them carefully. FINRA advises that statements may have subtle telltale signs that they have been doctored to conceal fraud.
Account statements often are the best tool investors can use to detect and stop potential broker fraud. Brokerage account statements provide invaluable information, including account numbers, broker and clearing firm contact information, and a summary of investment holdings. If you see anything that looks suspicious on your account statements, do not ignore it. Ask your broker or the brokerage firm about it; if you do not get a satisfactory answer, consider contacting a broker fraud attorney.
Specific red flags of broker fraud identified by FINRA include:
Inconsistent end dates and statement periods, or no end date or statement period listed
Account numbers that change suddenly, or assets that are suddenly missing
Incorrect address and account information, or incorrect ownership information.
Improper or completely missing disclosures
Phone numbers that are disconnected, always busy or never answered
Unknown brokers listed, no clearing firm information provided, and unknown dividend or interest income sources
Unrealistic account performance, such as always reporting gains
Excessive or strange fees, or unauthorized transactions listed.
ENSURING ACCURACY IS KEY TO DETECTING FRAUD
The value of investments made via brokers and brokerages are tallied at the end of each statement period and mailed to respective account holders. If a change in your account numbers or other standardized information suddenly occurs, FINRA advises contacting your brokerage firm right away to correct any issues. If the faulty information continues, broker fraud might be the problem.
Brokerage firms hold investors’ securities, and account statements must contain their contact information. Account statements also include account performance, such as income, dividends, deposits, withdrawals, and maturity dates for bonds. Following them closely helps investors track their money and locate potential issues that might indicate broker or brokerage fraud.
Monthly statements also should include portfolio details that outline individual assets that comprise the account. Portfolio details often include breakdowns of investments by asset class, bond insurance ratings, yield, and unrealized gains and losses. The monthly statements should enable investors to ensure the investments made are in accordance with their goals.
Disclosures and definitions also are critically important elements of investor statements. They define and disclose the various codes and terms used in statements and help investors understand the information provided. The information should include explanations of various types of investment accounts. Any detailed or revised information should include definitions, explanations, and other pertinent data.
The bottom line is that as an investor, you should pay careful attention to your statements. Many people never look at their statements, or they only read the summary page. If you see a trade you did not authorize or another discrepancy, it could be a sign of fraud, or it could simply be a mistake. But you can help prevent yourself from being a victim by calling the issue to the attention of your brokerage house. If the answers you get are not satisfactory, talk to our broker fraud attorney.
Attorney Matthew Wolper
Matt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks.
MOST COMMON EXAMPLES OF FRAUD COMMITTED BY BROKERS
FINRA’s Investor Complaint Center receives complaints across the nation from investors concerned about broker fraud or other problems with their investment brokerages. FINRA investigates investor complaints to determine whether or not likely violations of the nation’s securities laws and financial regulations might have occurred. FINRA reports that the most common investor brokerage fraud problems arise from four sources.
Misrepresentation is the most common form of securities fraud and occurs when a brokerage firm or broker makes material misstatements or fails to disclose material facts in connection with the purchase or sale of securities. Common examples of misrepresentation include the failure to accurately disclose risks or conflicts of interest and making false promises or assurances regarding investment performance.
High-pressure sales tactics occur when brokerage firms or brokers aggressively push prospective and existing clients to purchase securities and/or deposit assets to be managed by the broker. Most frequently, high pressure sales tactics are accompanied by false promises regarding investment performance and a misrepresentation regarding the characteristics of the investment. Senior investors and retirees are the most common targets.
Unsuitable investment recommendations refer to the purchase or sale of securities that are inconsistent with the client’s investment objectives and risk tolerance. The recommendation of “aggressive” securities in the account of a “conservative” investor or the recommendation of illiquid securities in the account of an investor who requires access to his/her capital are common examples of unsuitable investments.
Unauthorized trades occur when a brokerage firm or broker purchases or sells securities in a customer’s account without first obtaining authorization. Most often, a broker who engages in unauthorized trading does so for the purpose of generating additional commissions.
Four Common Brokerage Fraud Sources
Misrepresentation and false statements
High-pressure sales tactics
Unsuitable investments counter to clients’ goals
What To Do If You Suspect Broker Fraud
If you suspect broker fraud, you can file a complaint with FINRA’s Investor Complaint program. FINRA will investigate and may take disciplinary action against the broker and/or their firm if they find problems. However, if you have lost significant money due to broker fraud, filing a complaint will not typically get you your money back. In order to have a chance at recovering your investment, you will either have to file a claim for arbitration (or mediation) with FINRA or sue the broker and/or their firm in court. For experienced help in working to recoup your investment losses, reach out to our broker fraud attorney for help.
Know Who You Are Trusting with Your Investment Money
You can potentially prevent broker fraud in the first place by checking the backgrounds of brokers and brokerage firms you are considering hiring. FINRA and the U.S. Securities and Exchange Commission both have online tools for checking the backgrounds of brokers and their firms. These sites provide licensing information and show whether disciplinary actions have been taken in the past.
There are many ethical and honest brokers in the securities industry. Unfortunately, there are also dishonest brokers as well. While these tools may help you in finding an ethical broker, they may not completely weed out the unscrupulous brokers and firms. For this reason, you must always do your own due diligence in paying attention to your account statements and looking for other signs of potential fraud. If you do suspect fraud, reach out to our broker fraud attorney today.
DON’T WAIT IF YOU SUSPECT YOU’VE BEEN CHEATED. TALK TO ONE OF OUR BROKER FRAUD ATTORNEYS TODAY.
Investment fraud, including broker and brokerage fraud, costs Americans between $10 billion and $40 billion every year, the Securities Investor Protection Corp. says. The estimated amount that investors lose to misconduct varies greatly, because many victims do not report a large portion of investment schemes, including broker fraud.
One reason many people do not report schemes and fraud may be that they are embarrassed at being a victim and do not want to draw attention to themselves. For some broker fraud victims, the stigma attached to being duped may be too embarrassing to file a complaint and make the matter public, in spite of losing significant money. In other cases, investors who have been defrauded might not even understand whether fraud really occurred or even realize they were victimized. If they questioned their broker about something suspicious and were assured that there is nothing wrong, they may not have the securities industry knowledge needed to further question the “professional” or to accuse them of wrongdoing.
But no investor should ever feel embarrassed about being taken by a bad broker or not understanding whether they were victimized. The securities industry is extremely complex, and people who work in it every day know its intricacies. The dishonest players know how to manipulate the complexities to make money through fraudulent schemes.
Broker Fraud Can Target the Elderly
Many victims may lose all hope of recovering any of their lost investment money and try to put the matter in the past. The problem is, for many victims of investment fraud, putting the matter in the past is nearly impossible. That is because the effects often last the remainder of the victim’s lifetime.
Sadly, elderly people are among the most vulnerable to investment and broker fraud. Why is this so? Elderly people who have saved throughout their lifetimes for retirement often have more investment assets, so they are often more likely to be targeted. But no matter whether people are seniors or younger, if they have money to invest, they can become victims of unscrupulous brokers seeking to line their own pockets.
Investment Fraud is Stealing. Don’t Ignore It.
If your car were stolen from your driveway, you would report it. When a broker commits fraud, he or she is stealing from you. You should not ignore it. If you have lost significant money in investments and are not sure whether misconduct by your broker or brokerage firm was the reason, our broker fraud attorneys will investigate the evidence and advise you of whether you may have a claim to get your money back.
Call our law firm at 866.814.2801 for help today. We provide free consultations, so you have nothing to lose by speaking with us and potentially much to gain in getting your investment money back.
Broker fraud can devastate retirement accounts, family assets and plans for the future. The experienced broker fraud lawyers at the Wolper Law Firm, P.A. have three decades of combined experience helping investors get their money back. When faced with potential broker fraud, experienced legal help is essential. Contact us today to arrange a free consultation about your case. Our law firm is dedicated to recovering investment losses for our clients.