Financial Advisor and Stock Broker Lawsuits

Financial advisor and stock broker misconduct is not uncommon; in a typical year, investors claim over $2 billion in losses due to financial advisor fraud and misconduct. Various state and federal laws make it illegal for financial advisors and brokers to commit fraud, or to handle investors’ funds negligently.

For example, brokers and financial advisor lawsuits and arbitrations have forced brokers to repay money for excessive trading, unauthorized trading, investing in unsuitable investments, and stealing money from clients’ accounts. Read about more examples of broker misconduct.

Where and how you can sue your broker or financial advisor depends on federal and state laws, the investments you hold, and the terms of the contract or customer agreement you signed when you began working with your advisor. Generally, investors can sue their stock brokers and financial advisors through arbitration or civil lawsuits.

Most financial advisor and stock broker contracts require arbitration to resolve disputes, and limit an investor’s ability to file a lawsuit in court. Arbitration proceedings are held in front of a single arbitrator or small panel of arbitrators who, similar to a judge in court, decide the outcome of a dispute. The decision of the arbitrator becomes binding, just as if the case had been heard by a judge or jury.

In the financial industry, it is often required that arbitration cases are filed through the Financial Industry Regulatory Authority (FINRA). The largest financial dispute resolution forum in the U.S., FINRA handles over 5,000 investor lawsuits per year against financial advisors, and determines the specific procedures and rules that must be followed. Learn more about FINRA Arbitrations.

In some situations, an investor may be required to file an arbitration through a different arbitration forum, or may be able to file a civil lawsuit in court. Ultimately, where and how to file an investment fraud lawsuit depends on a number of factors. Our experienced financial fraud lawyers can explain your options and how best to proceed against your broker or financial advisor.

We are happy to review the contract you have with your financial advisor or stock broker and help you understand what it says and how it affects your ability to recover your money.

Some investors are concerned about the prospect of paying an hourly rate or having to pay out-of-pocket in advance for legal representation to sue their broker. We represent our clients on a contingency or “success-fee” basis, which means that if you win the case, the lawyer’s fee comes out of the money awarded to you. If you lose, you will not be required to pay your attorney for the work done on the case.

We are happy to discuss any questions related to our fees as well as different arrangements we can structure.

If you think your broker took advantage of you or a family member, there are steps you can immediately take to fight back:

1. Don’t delay
   Every legal claim has a certain amount of time in which you must file a lawsuit (known as a “statute of limitations”). If you don’t act within that time period, you may lose your ability to sue your broker. Sometimes when investors discover that they have been defrauded, they feel embarrassed and ashamed; this can paralyze people and prevent them from seeking help or taking quick action. Reacting rapidly when you discover a possible fraud is incredibly important because the passage of time may affect your rights.
2. Gather your documents
   Financial statements, stock trades, customer agreements, emails, and other correspondence with your broker could be relevant and useful.
3. Consult with an experienced financial fraud lawyer
   Our skilled financial fraud lawyers can conduct an account audit to determine the full extent of your damages and determine whether misconduct occurred. Brokers or financial advisors who commit one type of fraud or scam often don’t stop there — understanding the full extent of the harm is critical to determining how best to proceed.

Scott Silver

Scott focuses his law practice on securities arbitration and litigation and plaintiff-side class action litigation, representing individual investors and institutions in claims against brokerage firms, investment advisors, commodities firms, hedge funds and others.

Eileen Epstein Carney

Eileen is involved in the firm’s securities practice and has over a decade of experience in the legal world. She received her law degree from American University in 2005.

Dave Stein

David’s advocacy has generated major recoveries for consumers impacted by financial fraud. He was named to the Top 40 Under 40 by Daily Journal and a “Rising Star in Class Actions” by Law360.

Amanda Karl

Amanda is spearheading a securities lawsuit against NantHealth concerning fraudulent statements to investors about the success of its key product.