• January 11, 2021
• Investor Education

Suffering losses is, unfortunately, a common occurrence within the securities industry and financial markets. As an investor, it’s something you get accustomed to over time. However, these losses should never be caused by the conduct of your stockbroker.

You may not be able to change what has already happened, but by taking action as soon as you discover your stock losses, you may be able to prevent further investment loss. Continue reading to learn more about what to do if your broker-dealer caused your investment losses.

Consider Your Options

It’s nearly impossible to stop stock losses already in action, but you can do something about it when your broker is liable. There are several options available to wronged investors who are able to prove that broker negligence or fraud caused their losses. We describe these common options further below.

FINRA Arbitration

The Financial Industry Regulatory Authority (FINRA) oversees stockbroker and brokerage firm conduct. Arbitration is an excellent, and often preferred, way to go about getting your money back.

In FINRA arbitration, a panel of arbitrators hears your case, similar to a judge, and makes a decision based on the evidence presented. FINRA arbitration decisions cannot be appealed, but they are often resolved more quickly and investors can actually recover their losses in a timely manner.

Filing a Lawsuit

Another option is filing a lawsuit against the brokerage firm, broker, or other liable parties. Although this is a valid option, going to court is often far less successful than arbitration. It isn’t that you can’t win your case; it’s that the defense can bury you in appeals—so much so that it could be years before you see a penny of restitution, if ever.

Conversely, you may be able to seek recovery of more than just your investment loss if you pursue a lawsuit. In addition to your financial losses, you may be able to recover compensation for non-economic damages, as well.

Furthermore, a judge and jury may be inclined to award you punitive damages if the actions of the defense warrant this. This could dramatically increase the amount of your award.

SIPC Protection

The Securities Investor Protection Corporation (SIPC) provides coverage of up to $500,000 if an investor suffers losses that are caused by a failing or failed brokerage firm. When a brokerage firm begins liquidation, the SIPC’s goal is to ensure that investors retain their securities and cash, or the value of such.

However, it is important to note that the SIPC does not handle cases of broker misconduct. They will only provide relief if an investor’s brokerage firm fails.

Meet with a Respected Lawyer About Your Stock Losses

If your broker-dealer made decisions that resulted in your investment losses and you are interested in holding them accountable, get help from a qualified lawyer at Wolper Law Firm, P.A.. To schedule your free, no-obligation consultation, give our office a call at 800.931.8452 or complete the convenient contact form below so we can get started on your case.