Did you invest in an alternative investment? Have you lost money due to this investment? If so, you may be entitled to financial restitution. Get in touch with a FINRA arbitration lawyer to discuss your legal options.
Alternative investments are not usually accessible to investors that are not accredited, and if your stockbroker or financial advisor sold you an alternative investment you lost money on, you may be able to recover these funds when you file an arbitration complaint with the Financial Industry Regulatory Authority (FINRA).
But you may be unsure whether your broker wronged you or what the arbitration process looks like, and therefore may be hesitant about moving forward with your case.
Fortunately, an experienced FINRA arbitration lawyer at Wolper Law Firm may be able to help. Alternative investments are not regulated by the U.S. Securities and Exchange Commission (SEC), and are often subject to fraud and other schemes. If you’ve suffered an alternative investment loss, contact our office to find out whether you have a case.
What Is an Alternative Investment?
First, let’s take a closer look at what an alternative investment is, so you know whether this is the type of loss you have endured. An alternative instrument is any financial asset that does not qualify as being conventional. Conventional assets include cash, stocks, and bonds. Some examples of alternative investments could include:
- Hedge funds
- Real estate
- Derivatives contracts
- Arts and antiques
- Private equity
- Managed futures
- Venture capital
Risks of Alternative Investments
There are a couple of major risks associated with alternative investments. The first is that they are often not registered by the SEC, which means they are not being regulated by the SEC either. This makes them a riskier investment.
Another issue is that most alternative investments are illiquid and difficult to value. For example, let’s say you were sold an antique item and only a few of that item were made at the time. It may be difficult to determine how much that antique is actually worth, not only for the item itself, but also for its relative value to a potential buyer.
For these reasons, alternative investments will often require high upfront minimums and be accessible only to accredited investors. An accredited investor is one who has an annual income of more than $200,000 or a net worth that exceeds $1 million. This net worth does not take into consideration the value of an investor’s residence.
When an alternative investment becomes accessible to a non-accredited investor, there is usually a reason why. Either the financial advisor in question is attempting to defraud the investor in some way, or the alternative investment isn’t what it seems to be. In either case, the investor can endure considerable losses as a result of these alternative investments.
What to Do If You Lost Money Due to Alternative Investments
In order to recover your losses after purchasing an alternative investment, you must be able to prove that your financial advisor or firm wronged you in some way. There are a number of different ways this could have been, but in many cases, it is because of one of the following:
- Investment fraud
- Failure to supervise
- Selling away
If you have lost money on alternative investments for any of these reasons, you may be able to initiate a FINRA arbitration complaint against your financial advisor and firm and possibly recover these losses.
FINRA arbitration is similar to court, with several exceptions. First, once a decision has been reached in arbitration, it cannot be appealed. The second is the amount of time it takes to settle your case. In court, it could be years, if ever, that you receive financial restitution. But if you go to arbitration, a decision can be reached—often within eighteen months. If you win, the respondent must repay you within thirty days of the decision.
For these reasons, investors are often willing to move forward with arbitration in order to recover their losses rather than waste time in lengthy court proceedings.
Get Help from an Alternative Investments Lawyer
To learn more about what the next steps should be in your alternative investments complaint, reach out to an aggressive FINRA arbitration lawyer at Wolper Law Firm to discuss the individual details of your case. Complete the online contact form below or call 800.931.8452 to schedule a free, no-obligation complaint review.