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Trusted Birmingham FINRA Arbitration Attorneys Providing Comprehensive Counsel to Investors

Obtaining justice when brokers and firms are negligent in their duties, or fraudulent in their intent to deceive investors

Investment professionals can be an excellent resource for clients, offering a high level of expertise and experience to investors. However, brokers and firms are frequently offered high commissions for selling certain securities, which can sway these individuals to provide their clients with counsel that is not in their best interest. The team of Birmingham FINRA arbitration attorneys at The Frankowski Firm has the knowledge and experience to obtain justice for investors who have been the victim of securities fraud or negligence.

How can FINRA arbitration help investors?

If you have been the victim of fraud or negligence and have lost money as a result of your broker’s misguidance, you may have grounds for a claim and be entitled to damages for your financial losses as well as legal fees and, in some cases, the amount the investment would have earned if it were handled properly. Other damages may also apply.

These cases are handled through the FINRA arbitration process. FINRA is the entity that licenses and regulates brokers and investment firms. Most investment contracts require that clients waive their right to a jury trial and have their claim handled through FINRA arbitration. This is a complex area of the law, and it is essential to have an experienced Birmingham FINRA arbitration lawyer to guide you through the process.

FINRA arbitration begins with the investor filing a Statement of Claim (SOC) that would then be formally answered by the respondent. Both parties have the opportunity to indicate their preferred choice from a list of FINRA-approved arbitrators. Both parties, along with the arbitrators, participate in a preliminary conference call, followed by a limited discovery process in which relevant documents are exchanged. Then, a final evidentiary hearing is held

Simplified arbitration is available in claims involving less than $50,000.00 in damages. In such cases, only one arbitrator is involved, as opposed to three in typical FINRA arbitration. Simplified arbitration is also a much shorter process, making it a more prudent option in some cases. There is not a final evidentiary hearing in a simplified case- the arbitrator bases his or her decision off the papers, such as the Statement of Claim, Answer and written final evidentiary submissions.

What actions are considered fraudulent or negligent?

When a broker puts his or her own interests before those of the client, or if the broker fails to meet industry regulations and best practices, that broker may be guilty of both negligence and fraud. Frequently, investment firms are also liable when brokers engage in fraud and negligence.

Rules and regulations for brokers and firms are established and maintained through the Securities Exchange Commission (SEC), the Financial Industry Regulation Authority (FINRA), and state laws. There are a number of obligations brokers and firms have to their clients.

Failure to meet these standards is often a cause or consequence of broker negligence or fraud. Some of the claims our Birmingham broker fraud attorneys have experience with are:

  • Suitability claims. Brokers must take a number of factors into consideration when determining whether a specific security is appropriate for an individual client. Factors such as risk tolerance and the client’s goals and financial circumstances all dictate what types of investments are suitable for a given client.
  • Failure to diversify. An investor’s portfolio should include several different types of investments in a variety of industries to avoid over concentration. Brokers must be careful to ensure that their clients’ investments are adequately diverse.
  • Breach of fiduciary duty. When a broker puts his or her own financial interests ahead of those of the client who has paid for their services, that broker has breached the fiduciary duty inherent in the investor/broker relationship.
  • Excessively selling and buying securities on the part of the broker to generate commissions with no benefit to the client is a fraudulent practice known as churning.
  • Selling away. Brokers and firms are guilty of selling away when they buy and sell securities that they are not authorized to trade.
  • Ponzi schemes. This deceitful practice involves brokers continually pursuing new investors as the only source of income in the investment. These sham investments typically end with the operator making off with the money or the operation being exposed for what it is.
  • Failure to supervise. Any negligence or fraud on the part of stockbrokers implicates the investment firm that the broker represents. If the firm failed to properly supervise the broker and did not put a stop to the misconduct before harm occurred to the client, the firm can be held liable.

Broker negligence and fraud are unfortunately common. At The Frankowski Firm, our Birmingham stockbroker negligence lawyers hold investment professionals accountable for their actions, and seek damages on behalf of investors who have sustained substantial financial losses.

Retain the support of an experienced Birmingham stockbroker fraud attorney

Investors who have lost money due to the carelessness or deception of a stockbroker or investment firm need experienced counsel that they can rely on. The experienced Birmingham broker fraud attorneys at The Frankowski Firm are equipped and available to provide you with the counsel you need to obtain justice. To schedule an appointment at our Birmingham office, call us at 888-741-7503 or complete our convenient contact form.

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