Our Securities Attorneys Assist Investors Who Have Suffered LossesPeople invest in stocks and other financial securities to save for retirement and future goals. It’s natural to trust financial advisors, brokers, and other professionals to properly invest your hard-earned money. Securities and investments are complex, and you expect those professionals to carry out your instructions. If you suffer large financial losses, you may be unsure whether it was because of the fluctuating market or because your broker mishandled your funds. You need an experienced securities attorney to help you discover the truth. Your brokerage firm or financial advisor is supposed to place your interests first. Unfortunately, as countless investors can attest, some brokers do not uphold that responsibility. Fraudulent or negligent brokers may fail to disclose material risks, suggest investments that are contrary to their clients’ instructions, or buy and sell stocks in a way that nets them fees at the expense of their clients. Negligence and stockbroker fraud puts your financial security at risk.
Why Choose Wolper Law Firm, P.A.?The Wolper Law Firm, P.A. is a client-focused law firm devoted to recovering investment losses on behalf of aggrieved investors. Our securities fraud attorneys in Illinois can pursue claims nationwide in state and federal courts, appear in arbitration before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (AAA) and JAMS. Wherever your case is being seen, our attorneys will represent you and your interests. When choosing a law firm to represent you in the recovery of investment losses, you should choose an experienced attorney who is able to take your case from the first assessment through the trial phase. We prepare each case as if it were going to trial, so we’re ready from the beginning. Our mission is developing a deep, trusting partnership with our clients that lasts through the entire process. When you come to Wolper Law Firm, P.A., you’re getting a team that has:
- A 99% recovery rate for defrauded and wronged investors.
- Satisfied customers and five-star recommendations.
- Free initial consultation and live chat 24/7.
- Recovered millions of dollars for our clients in dozens of cases.
- A record of putting their clients first. No fees unless you win.
Why Do I Need a Securities Attorney?There are no guarantees in the investment world. Every investment carries risk, and some carry more risk than others. World events can cause upheavals nobody can predict. If you invest in the securities market and lose money, it does not mean your advisor or stockbroker did anything wrong. However, just because you lost money, this does not automatically mean you have a legal claim. You must be able to show that you were the victim of intentional misconduct, fraud, or even unintentional negligence in order to have a claim. The complex nature of securities and investments makes proving fraud or negligence a matter of showing a repeated pattern of improper transactions, deliberate attempts to mislead you, or similar intentional acts. These acts must be carried out in violation of federal or state laws. These aren’t things a layperson will know. You need a knowledgeable securities attorney.
Frequently Asked Questions about Securities Law
The federal Securities Act of 1933 prohibits fraud in the sale of securities and requires that investors receive financial and other information about public securities offerings. The Securities Exchange Act of 1934 created the SEC and gave it power to regulate and discipline brokerage firms and their agents.
So-called “blue sky” laws are state laws which protect investors within each state. These laws vary in each state, but generally require companies to register the securities they offer, and they also license financial advisors, brokerages, and brokers.
Investment fraud is depressingly common. In 2020, FINRA referred nearly 1,000 cases of fraud and other misconduct for criminal prosecution. That same year, nearly 250 brokers were barred from trading, and 375 more earned temporary suspensions. Investors should not wait to report suspected fraud and misconduct.
Securities fraud elements in Illinois include misrepresentation of a material fact, knowledge of the falsehood, intent to mislead the investor, the investor’s reliance on the falsehood, and damages resulting from the misrepresentation. With this in mind, it is easy for a crooked broker to defraud an investor and it can be difficult for the investor to realize what happened.
Greed, carelessness, and the complexity of securities laws are some of the primary reasons fraud occurs. Another factor is the distance between the investor and the broker. People typically trust their broker to handle their investments and then pay little attention their portfolio unless something goes wrong. This trust lets dishonest brokers omit details or outright lie to their clients when mismanaging their money. Misplaced trust is not a reason to let negligent or criminal brokers off the hook. They owe a fiduciary duty to their clients to manage their money honestly.
Brokers and financial advisers who commit fraud or embezzle their clients’ money or who commit other criminal acts may be criminally prosecuted. They may face large fines and prison sentences and may lose their securities certificates or brokerage licenses.
Those found guilty of negligence may escape criminal charges but may be required to repay their clients’ money and may lose their right to trade or practice as brokers or advisors.
Churning is an illegal method dishonest brokers sometimes use to generate commissions. Brokers earn fees and commissions each time securities are bought and sold. These commissions are paid out of the client’s account. Although buying and selling securities by itself isn’t illegal, doing it too often or without notifying the client is. If the broker is earning large commissions and your portfolio isn’t gaining by all the movement, churning could be to blame.
Some types of securities have overtrading or withdrawal fees that can further drain your account. Your broker should not be moving funds around in your portfolio unless they can show it is to benefit the account.
Because of the time and cost of litigation, most brokerage firms today include arbitration clauses in their customer agreements. In arbitration, independent arbitrators, or administrative law judges (ALJs) hear the evidence and arguments from both sides and then make binding decisions. This decision is final and cannot be appealed, unlike a court case. If the decision goes in your favor, the advisor or broker who committed misconduct will have 30 days to pay you your financial award.
Arbitration has the advantage of being less expensive and less time-consuming than traditional litigation. The disadvantage is that if you lose, you cannot appeal your case. If you are required to arbitrate by the terms of your agreement, our securities attorneys can represent you in your arbitration, just as they would in a trial.
How To Tell if Your Money is at RiskIt can be difficult to know if your financial advisor or broker is doing something wrong. The financial climate is volatile, and you cannot always assume that a poor performance is the fault of your broker. Financial advisors and brokers have a fiduciary duty to their clients. This means that they must always act in their clients’ best interests, not engage in self-dealing or misuse of funds, and be always transparent with their client. With that in mind, there are some warning signs you can watch for if you believe anything is wrong.
- Your broker recommends investments that are unsuitable or that do not align with your previously stated financial goals and acceptable risk. This may be a sign of self-dealing or churning in your account.
- Misrepresenting speculative or complicated investment opportunities or failing to fully explain new opportunities when asked.
- Large, unexpected losses in your portfolio when the market is performing well or, alternatively, sudden gains in your portfolio when the market abruptly drops. Too many investors are pleased to see their portfolios make big gains when the market drops, but unscrupulous brokers may be shorting stocks and using their clients’ portfolios as covers.
- Multiple transactions which were not authorized, especially if they take place in a short period of time. The SEC regulates buying and selling stocks and places time limits on how many may be purchased or sold within a given time. If your broker is doing anything illegal, you could end up paying the fines.
- If your broker abruptly becomes difficult to find, won’t answer your phone calls, or seems disinclined to answer questions, you should become immediately suspicious.
- Any missing money which cannot be accounted for is an obvious sign that something is wrong.
Make Sure Your Finances Are SecureYou can always check your broker or financial advisor before investing with them. Multiple agencies and government sites will let you verify the credentials of brokers, brokerage firms, and financial advisors.
- Say “no” to investment opportunities that sound too good to be true.
- Don’t allow yourself to be pushed into quick investment decisions.
- Walk away from securities that don’t have documentation.
- Don’t buy unregistered securities.
- Ignore anyone who contacts you with an unsolicited securities offering.