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Representation of Defrauded Securities Investors

Representation of Defrauded Securities Investors

The Firm represents customers of securities brokerage firms, investment advisory firms and hedge funds who have been defrauded or whose investments assets have been mismanaged resulting in financial loss.

Typically, these cases are handled through FINRA arbitration on a contingency fee basis.

Misconduct Comes in Many Forms

Stockbroker and financial misconduct comes in many forms. Victims of fraudulent acts may be able to recoup their investment losses. Most claims against stock brokers and investment advisory firms fall into the following categories:

  • Churning: Excessive trading in order to generate commissions
  • Unauthorized trading: When a broker buys and sells without client consent
  • Selling awayWhen an individual broker sells an investment to a client without the approval and knowledge of the brokerage firm — the brokerage firm may be held accountable for failure to supervise
  • Stock manipulation: When a broker is involved in pumping up the price of stock, allowing insiders to sell out at an inflated price; retail clients are usually left with stock of little or no value
  • Unsuitable investment recommendations: Recommending the purchase of an investment that is not appropriate for the particular investor given his/her age, investment objectives, risk tolerance, etc.

Firm’s Representation of Ponzi Scheme Victims

Many victims of Ponzi schemes were sold the fraudulent investment through a trusted stockbroker or financial advisor who works for a securities brokerage firm.  The stockbroker or financial advisor often has not done the proper due diligence on the investment, may not fully understand the business and how it is to pay the unrealistic promised returns, and is likely blinded by the large commission payout he is to receive from the sale of the investment.  The broker has also usually not informed his employing securities firm that he is selling the investment (this is called selling away from the firm).  Unfortunately, by the time the Ponzi scheme unravels, it is too late and the money is gone.

In these situations, the Firm has had success in pursuing arbitration claims for the recovery of investment losses against the securities brokerage firm that employed the stockbroker or financial advisor who sold the fraudulent Ponzi scheme investment.  The theory of the case is that the securities firm, which has an obligation under the securities laws to reasonably supervise its employees, is responsible for the investment losses because it failed to supervise the activities of the stockbroker who sold the fraudulent investment.  This is true even if the securities firm had no knowledge of the sales, and even if it did not profit from them.

The Firm has obtained justice and compensation for individual clients, as well as groups of clients, in negligent supervision claims against securities brokerage firms that have sold Ponzi scheme investments to their customers.

Do You Have a Case?  10 Important Questions.

Ask yourself the following questions to determine whether you may have legal grounds to pursue a case for the recovery of your investment losses:

  1. Did your stockbroker or financial advisor make false statements about the investment he recommended to you, or did he fail to disclose certain important information?
  2. Did your stockbroker or financial advisor invest your monies too aggressively or in highly risky investments?
  3. Did your stockbroker or financial advisor invest most or all of your money in one stock or bond, or in one particular economic sector?
  4. Did your stockbroker or financial advisor fail to diversify your investment assets?
  5. Did your stockbroker or financial advisor excessively trade or “churn” your account generating significant commissions?
  6. Did your stockbroker or financial advisor make trades without your authorization and knowledge?
  7. Did your stockbroker or financial advisor sell you a promissory note or other private investment without the knowledge of his employer?
  8. Did your stockbroker or financial advisor fail to generate income for you in your retirement years?
  9. Did your stockbroker or financial advisor sell you a variable annuity that has lost money and tied up your funds?
  10. Did your stockbroker or financial advisor use margin and/ or trade options in your account?

If you have answered YES to any of these questions, you may have a case.

If you suspect you were taken advantage of by a dishonest financial investment professional, don’t hesitate to call for a confidential, no obligation consultation.  While the Firm is located in Fort Lauderdale, Florida, it represents investors nationwide and globally.

Answers to Frequently Asked Questions About Securities Arbitration through FINRA

Because most brokerage firms include arbitration clauses in their customer agreements, you have most likely waived your right to a trial in court.  As a result, you must bring your case in arbitration through FINRA (Financial Industry Regulatory Authority) Dispute Resolution.

What is arbitration?

Arbitration is a method of resolving a dispute by referring it to an impartial third party panel, which is agreed upon by those involved in the dispute. It is similar to a trial, except the judge and jury are replaced by a panel of one to three arbitrators.

How long does arbitration take?

Arbitration is usually much faster (and more affordable) than civil court. The average length of time from the initial filing to the first hearing is approximately one year. A securities arbitration hearing can last anywhere from one day to several weeks.

Where is the arbitration proceeding held?

There are designated arbitration hearing locations in every U.S. state.

How much can you recover?

There are several damages and fees which you may be able to recoup if you were a victim of securities fraud. At the very least, we will pursue recovery of the money you invested less the returns and residual value of the investment. Possible damages include:

  • Out-of-pocket losses
  • Punitive damages
  • Attorneys’ fees
  • Prejudgment interest

How much will it cost me? What is your attorney’s fee and what are the costs involved?

  • Most cases are handled on a contingency basis — meaning if there is no recovery, you owe no attorney’s fees.   Depending upon the facts of a case, the attorney’s fee contingency percentage will likely range between 30% to 40% of the recovery.
  • Arbitration costs are paid to third-parties and include a filing fee for FINRA, hearing session costs, in certain cases an account analysis and expert witness fees, along with document copying expenses. If the case settles before a final hearing, costs may range from $3,500 to $5,000. If the case goes to a final hearing (trial), costs may range from $10,000 to $25,000.  Please note that these are estimates, and every case is different.