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FINRA Suitability Rule

If you lost money after being suggested an unsuitable investment opportunity, the FINRA suitability rule could be in your favor. Reach out to an experienced FINRA arbitration lawyer for help with your complaint.

The Financial Industry Regulatory Authority (FINRA) has a set of rules in place that financial advisors, stockbrokers, and broker-dealers are obligated to follow when working with investors. One of these rules is known as the FINRA suitability rule. When this rule is broken, the broker may be compelled to repay you for the losses you endured.

At Wolper Law Firm, we take the FINRA suitability rule very seriously. If a stockbroker has failed you in this regard, FINRA arbitration may be the best way to get your money back and hold the financial advisor accountable for their actions. Read on to learn more about FINRA suitability and what makes an investment unsuitable.

What Is the FINRA Suitability Rule?

FINRA Rule 2111 is the suitability rule. Here, FINRA regulations clearly state that before a financial advisor or firm recommends an investment opportunity to an investor, they must have a reasonable belief that the investment is suitable for the investor. This means that the investment opportunity must align with the goals and objectives the investor outlined in their investment portfolio.

In order for a stockbroker to know an investment is suitable, they must have done their due diligence by researching the investment opportunity in detail and informing you of the risks.

When Would a Recommendation Be Considered Unsuitable?

An investment recommendation may be considered unsuitable for any number of reasons. Maybe the investor didn’t do their research before making the suggestion, or perhaps the type of investment is far riskier than the investor said they were willing to accept as outlined in their investment portfolio, for example.

Unsuitable investments is one of the most common ways investors lose their money, and often, the only way to recoup these losses is to pursue a FINRA arbitration complaint. Depending on how significant the losses were, one or three arbitrators will hear both parties present evidence to support their case. Then, the arbitrator(s) will retire to deliberate and review the circumstances of the case.

In many situations, a decision can be reached in as few as eighteen months, and settlements paid to wronged investors in under two years. If you believe your broker’s unsuitable recommendations were the cause of your investment losses, you may be able to recover these funds by initiating a FINRA arbitration complaint.

Get in Touch with a FINRA Arbitration Lawyer

If you have been a victim of unsuitability and are interested in seeking maximum recovery of your losses, schedule a free consultation with a FINRA arbitration lawyer at Wolper Law Firm. We can be reached by phone at 800.931.8452 or through the online contact form at the bottom of this page when you are ready to move forward with your case.

Attorney Matthew Wolper

Attorney Matthew WolperMatt 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. [Attorney Bio]