Responsibilities of FINRA
FINRA is overseen by the U.S. Securities and Exchange Commission (SEC). Their primary goal is to ensure that the financial markets in the United States are running smoothly and fairly. Some of their key responsibilities include educating investors, implementing and enforcing ethics guidelines for all registered brokers and broker-dealers, and ensuring that brokers and firms comply with these ethics rules.
Investors who have reason to believe that their stockbrokers or financial planners have wronged them in some way, causing them large stock and investment losses that could have been prevented if it hadn’t been for the misconduct of these individuals and/or corporations, have options. Those investors can file complaints with FINRA and potentially be awarded repayment of their losses through arbitration or mediation. But knowing whether your losses were due to broker misconduct or negligence isn’t always easy. An experienced FINRA attorney in Georgia know the types of dishonest schemes that brokers use to defraud investors. Our Georgia FINRA attorneys can help you understand whether you have been a victim of an unscrupulous stockbroker. If you have been, we can help you hold them accountable for their actions.
You Could Get Full Restitution for Your Investment Loss. Turn To Our Skilled Georgia Investment Fraud Lawyers To Learn More.
When to File a Complaint with FINRA for Investment Losses
Even if you have noticed a considerable loss in your portfolio, you may think that it was simply part of the risk you took in investing in the first place. This may be true in some cases, but you should be able to count on your stockbroker to avoid such losses wherever possible.
Some stockbrokers will make poor decisions surrounding your investments if it means they’ll see considerable personal financial gains, so you should be prepared to bring them to justice for this type of misconduct.
With that said, there are some types of fraud that brokers engage in more frequently than others. The good thing is that these schemes almost always leave a trail of financial documents that can support your case if you choose to proceed with FINRA arbitration.
These schemes include:
- Failure to supervise. Brokerage firms may be liable if they failed to properly supervise or train a broker who commits a violation.
- Misrepresentation and/or omission. Misrepresentation is when a stockbroker intentionally withholds material information or provides investors with misleading information in order to influence an investment decision.
- Excessive trading. Excessive trading, also known as churning, is when brokers over-trade in investors’ accounts in order to generate commissions for themselves on each trade.
- Failure to diversify. To avoid undue risk, investment portfolios should be diversified across businesses, industries, and product types. When they are not and investors lose money, brokers may be liable for a failure to diversify.
- Selling away. Selling away is when a stockbroker sells investments, often high-risk ones, that are not approved or offered by their brokerage firm.
- Unauthorized trading. Unauthorized trading occurs when brokers make trades in nondiscretionary accounts without the authorization of the investors.
- Unsuitable investment recommendations. When brokers recommend investment opportunities that are not aligned with the investment objectives and risk tolerance of their customers, those unsuitable investment recommendations may be evidence of fraud.
In the event that you are unsure whether you’ve been defrauded by your broker, you can bring your financial records and other relevant documents to one of our Georgia FINRA lawyers, who can assist you with your case.
If we find any evidence of misconduct, we’ll take the steps necessary to get your money back, which might require filing a FINRA claim for arbitration. Call us for help at 855.293.4933.
What to Expect When You File a FINRA Arbitration Claim
Arbitration cases are decided by neutral arbitrators who are selected by both parties involved in the claim. Depending on the amount of the investment loss involved, either one or three arbitrators determine claims. FINRA Rule 12401 provides that:
- Claims of $50,000 or less will consist of one arbitrator.
- Claims of $50,000 to $100,000 will involve one arbitrator unless the parties agree in writing to have three.
- Claims of over $100,000 will have three arbitrators unless the parties agree in writing to have one.
Arbitration claims under $50,000 may be decided through a simplified process without going to a hearing. In a simplified arbitration case, the arbitrator decides the outcome based on the pleadings and other documents submitted.
For claims that go to hearings, the process is similar to going to civil court and presenting arguments before a judge. Both sides give their version of events and present evidence that supports their case. Fact witnesses and expert witnesses may be called to testify. There are closing statements in which the attorneys of the parties have one last chance to influence arbitrators.
Once both sides have pleaded their case, the arbitrators will deliberate the evidence and make a decision. Arbitration cases that go to hearings typically take about 16 months to complete. If an award is rendered to the investor, the broker/brokerage firm has 30 days following the decision to pay the money. If they fail to pay within this timeframe, they can face additional FINRA sanctions and legal action.
TAKE ACTION RIGHT AWAY WHEN YOU SUSPECT FRAUD – CONTACT OUR FINRA ATTORNEYS IN GEORGIA FOR A FREE CONSULTATION
FINRA arbitration is the most common way for broker fraud claims to be decided. The majority of brokerage firms have arbitration clauses in their agreements, binding investors to arbitration. In some cases, investors may be able to file lawsuits rather than go to arbitration. However, the court process typically takes much longer to reach a resolution, so investors could wait years to have a chance of recouping their money.
To learn more about options you may have for recovering your investment from a dishonest broker, contact Wolper Law Firm to speak with a highly trained Georgia FINRA lawyer. We provide free, confidential case reviews. Call 800.931.8452 to arrange a time to speak with us.
Do Not Let Time Run Out on Your Claim – Call Our Georgia FINRA Lawyers Today
You shouldn’t wait to reach out to an attorney to begin the claim process if you believe you were the target of fraud by a broker. There is a six-year statute of limitations for filing FINRA arbitration claims. If you didn’t discover your stock or other investment loss or other potentially fraudulent or negligent broker misconduct until after the incident happened, the clock on the deadline may not begin ticking until the discovery date. However, if you miss the six-year deadline for your claim, you will most likely lose the chance to recover your money.
Our FINRA Attorneys in Georgia Answer Common Questions
Filing a FINRA complaint can be overwhelming, and the thought of having to bring your case before a panel of arbitrators may be intimidating. We’ve seen firsthand just how difficult it can be to gather up the courage to fight for the money that is rightfully yours. For this reason, we have provided answers below to frequently asked questions so you can better understand some of the most common concerns surrounding FINRA complaints and what to expect if you choose to move forward with your arbitration claim.
If you have other questions or would like a more personalized idea of what’s to come for your specific case, contact our office to set up a free consultation with a well-informed Georgia FINRA lawyer.
No, you cannot. When arbitrators issue a decision, the decision is final and cannot be appealed. For this reason, many wronged investors will start off by going to mediation in the hopes of obtaining a settlement prior to going to arbitration. If mediation is unsuccessful, the next step is arbitration.
Arbitration is typically less expensive, and decisions are generally issued more quickly than they would be if you tried to file a lawsuit against a crooked broker in the courts, which usually makes arbitration the more attractive option overall for investors who have suffered significant losses.
In FINRA mediation, an impartial and trained mediator helps brokers/brokerage firms and investors resolve disputes and reach settlements. Mediation is an informal process in which neutral mediators work to facilitate communication between the parties. Mediators do not make resolution decisions themselves, but instead encourage parties to reach agreements that are mutually acceptable. For mediation to occur, both sides must agree to it. Mediation can take place before arbitration or even during the arbitration process.
Investment disputes that come to FINRA are settled through arbitration (or mediation), not through a civil lawsuit. However, in some cases, investors may wish to file lawsuits through the courts rather than going to FINRA arbitration. But if you have signed an arbitration agreement with your brokerage firm, you probably will not be able to resolve your claim through a lawsuit in civil court.
If you haven’t signed an agreement, our Georgia FINRA attorneys can help you explore your options for pursuing restitution to see what makes the most sense for your situation. Call us at 866.814.4939 to arrange a free consultation. Our attorneys are highly experienced at representing clients, both in FINRA arbitration and in civil litigation.
When you wish to take your case before arbitrators to get your money back, you file a FINRA claim. You can also file a FINRA complaint online, which could serve to protect other investors in the future. A complaint will initiate an investigation of the broker, advisor, or brokerage firm that you believe defrauded you or was negligent. If FINRA finds a securities violation, the agency will take action against the broker and/or their firm. These actions could include barring the broker from the securities industry, suspending their licensing or certifications, and fining them.
No—you are not required to hire an attorney to go to arbitration. However, you can be sure that the broker and brokerage firm you are bringing your claim against will have their own legal counsel who has in-depth understanding of securities law. Unless you are well-informed about the very complex laws surrounding securities investing, you may well do yourself a big disservice by not having your own attorney looking out for your interests, especially since FINRA decisions cannot be appealed. A lawyer who is experienced at handling FINRA arbitration claims will know what type of evidence to gather to prove fraud or negligence and how to compellingly present that evidence to arbitrators to get you the best possible outcome. Our FINRA attorneys in Georgia have a greater than 95% success rate in recovering compensation for investors.
Yes. Securities fraud is a white-collar crime and can be prosecuted. Most often, it is prosecuted under federal law, but states may prosecute as well. People found guilty of criminal securities fraud may face prison sentences and expensive fines, depending upon the specific charges and circumstances.
Anyone who invests in the stock market may be a victim of broker misconduct and fraud. Often people who are taken in by unethical brokers are passive investors who don’t regularly review their brokerage account statements, so they don’t realize that fraud is taking place. Elderly investors who have built up a lifetime of retirement savings are also often targets of unscrupulous brokers.
In fact, elder abuse in investing has become a focus area for state and federal regulators. If you are a senior citizen who believes you have been the victim of broker fraud, our FINRA attorneys can help you understand your legal options. You can also get answers to your questions and report concerns about potential broker fraud at the FINRA Securities Helpline for Seniors. Remember, though, everyone of any age who invests can become the victim of stockbroker fraud. All investors should carefully monitor their accounts for any unusual and potentially fraudulent activity.
Protect Yourself from Unscrupulous Brokers
Don’t Be Taken In By Shady and Suspicious Promises
Here are some warning signs of investment fraud:
- Your broker guarantees an investment will perform a certain way. Every investment involves some risk, and a broker cannot guarantee performance.
- A broker pressures you to make a quick decision on an investment, implying that if you don’t act right away you will lose the opportunity. Legitimate investment opportunities don’t disappear overnight.
- A stockbroker tries to sell you an unregistered security. Unregistered securities aren’t subject to all the laws designed to protect investors and are often sold by fraudsters.
- You are offered a stock, mutual fund or bond but are told there is no documentation for it. If a stock or mutual fund doesn’t have a prospectus or a bond doesn’t have an offering circular, it could be unregistered or otherwise fraudulent.
- The investment the broker describes is so complex that you can’t understand it. If you don’t understand the risks involved and they can’t be made clear to you, don’t invest.
- A security you are offered appears to provide consistent high growth and high returns even during market dips. Every investment can experience some ups and downs.
Investors who don’t pay close attention to their brokerage account statements are often targets of fraud. To protect yourself, review your statements regularly for unauthorized trades, excessive trading and other possible signs of broker misconduct or negligence. If you see anything unusual, bring it to the attention of your broker and/or brokerage firm. If it can’t be explained to your satisfaction, contact a FINRA enforcement attorney in Georgia from our law firm for assistance and report the broker to FINRA or another regulatory agency.
Check Out the Background of Brokers before Signing Up
You should not entrust your money to a broker without doing your homework. You could save yourself some unpleasant surprises and financial pain down the line by investigating any broker and/or brokerage firm you are considering investing with. You can find out about broker licenses and certifications and whether individuals or firms have faced disciplinary actions from regulatory authorities by visiting these links:
- FINRA Broker Check
- SEC Check Your Investment Professional
- North American Securities Administrators Association (NASAA) Contact Your Regulator
You should also not be afraid to “interview” an investment broker or advisor you are considering using. If a broker or advisor does not want to answer your questions about their professional experience, it is probably wise to move on to someone else who is more forthcoming about their background. Here are just a few questions to consider asking:
- What are your licensing and qualifications?
- How much experience do you have in investing?
- How do you get paid?
- What is your philosophy in investing?
- What services do you offer?
- How do you communicate with clients?
You may have other questions based on your unique goals and concerns. It can be helpful to write them down so that you are prepared when you speak with a broker.
Get Help from a Respected FINRA Enforcement Attorney in Georgia
You’ve worked hard for the money you invest. When you trust a stockbroker and brokerage firm to ethically and honestly handle your investments so that you can have a comfortable retirement or reach another important goal, learning that you’ve been defrauded of a large amount of money is devastating. It can bring all your plans to a screeching halt . . . potentially forever.
Our Georgia FINRA attorneys want to help you get your money back, whether through FINRA arbitration, FINRA mediation or a legal claim. We also want to hold unscrupulous brokers accountable for their actions. While many stockbrokers are honest individuals who sincerely want to help their clients grow their investments, those who are negligent or dishonest negatively affect the reputation of the entire securities industry, as well as potentially ruining their clients’ financial lives. If you’ve lost a substantial amount of money and suspect it was due to broker misconduct, don’t wait to take action. The sooner you act, the faster you may be on the road to recovery.
Arrange a free consultation with a skilled Georgia FINRA lawyer for your broker fraud or negligence case by calling 800.931.8452.
Our attorneys at Wolper Law Firm handle FINRA claims and other investment fraud cases for clients throughout the country. We can be reached seven days a week. Our business is to recover your investment losses.