Investors who lose money because of the mistakes or fraud by their stockbrokers or financial advisors may be eligible to recover their losses through a process known as arbitration. Arbitration claims involve all types of investments, including stocks, bonds, annuities and mutual funds.
We have in excess of 37 years of experience in prosecuting arbitration claims on behalf of individual brokerage customers.
Most arbitration claims against stockbrokers and financial advisors are required to be brought in arbitration before the Financial Institutions Regulatory Authority, "FINRA", rather than in court.
Our firm has represented scores of investors at hearing before FINRA. We are experienced in all aspects of securities arbitration, representing public customers.
Claims against stockbrokers and advisors take many forms. In most cases, "suitability" is an issue. An absence of "suitability" means that the investment sold to a public customer was not appropriate, as related to what the stockbroker or investment advisor should know is the customer's financial needs, based upon age, health, retirement status. The stockbroker or advisor is supposed to take these factors into account when selling you an investment. Failure to do so is actionable. Damages may be recoverable.
Did the broker or advisor lie to you? Other claims, just as important, relate to fraud and negligence. Did the broker or advisor fail to fully investigate the investment ? Failure to so may also result in a good claim.
We have prosecuted claims based upon nearly every theory of liability against stockbrokers and investment advisors, including:
- Unsuitable investments
- Churning of accounts
- Unauthorized trading
- Failure if Due Diligence
- Failure to Supervise
- Ponzi Schemes
- Elder Fraud and Disabled Person Abuse
A “Security” represents an interest in a publicly traded corporation, such as a stock or bond. The Security might be traded on any securities exchange or over the counter. A “security” may also be a partnership interest or a promissory note. Private corporations also have “securities.” In both cases, public and private, laws against fraud exist in respect of the “purchase and sale” of securities. These are set forth in part, in the Securities Exchange Act of 1934. State law fraud statutes are also applicable as well as common law.
When a broker or investment advisor is involved in the transaction, particularly with respect to a publicly traded security, the broker has many obligations. One is to sell the customer only a security which is “suitable” and meets the customer’s risk profile, age and financial circumstances. Failing “suitability” for a particular security, a claim may be advanced to recover losses. Many times “suitability” cases are advanced for elderly or disabled people who do not understand the risks inherent in the purchase of a security.
Similarly, when there is excessive trading, and commissions are generated only for the benefit of the broker, this might be “churning” of an account. Losses may also be recoverable. Many factors are considered in a churning claim.
These are only two of the claims which may be advanced. They are called, generally, “sales practice violations.” Many other claims and violations exist, including sale of unregistered securities, failure of due diligence, or simple fraud related to the characteristic of a security. Each case is different.
Persons who have sustained losses because of a “sales practice violation”, can seek redress through the Financial Institutions Regulatory Authority (FINRA). Many other agencies exist on the state and Federal Level. Administrative violations are frequently brought before the Securities and Exchange Commission (SEC), which may also discipline a broker.
Anthony M. Abraham, Esq., PC has 37 years of experience bringing claims for investors. The investor may be an individual or even a corporation or partnership.
Attorney Anthony M. Abraham has represented investors in claims of:
- Unsuitable investments;
- Churning of Accounts in which the broker, having control of the account, trades the account solely for his/her own benefit, to generate commissions.
- Unregistered securities, in which securities are sold in what is considered a public offering, but there was no written disclosures, such as a prospectus.
- Outright theft of funds from the customer’s account.
- Failures of Due Diligence. This means that the broker failed to investigate the security being sold; the omits to properly advise the customer that he or she could lose her money because of facts inherent to the company whose security was sold.
- Unauthorized trading.
- Failure to supervise. This claim is frequent and involves the omission by the employer of the registered representative to supervise and review the sales activities of the registered representative.
- Breach of fiduciary duty. This is broad claim involving any breach of trust by the broker.
Anthony M. Abraham is a member of the Public Investors Arbitration Bar Association and has also been a FINRA arbitrator.Call Us for a Free Consultation
If you are a victim of securities fraud, you should call us and retain a sophisticated attorney to see if your losses can be recovered. Mr. Abraham is experienced as a securities fraud lawyer.