Securities Fraud & FINRA Arbitration

Sarasota Securities Law Attorney

If you have lost money due to investment fraud, broker misconduct, or unsuitable investment recommendations, you may have legal recourse. Securities law provides specific protections for investors, and the process for pursuing claims is different from ordinary civil litigation.

Steele T. Williams has experience representing investors in FINRA arbitration proceedings and securities-related litigation. His Board Certification in Business Litigation provides the commercial dispute expertise that securities cases demand.

Securities Claims We Handle

• Unsuitable investment recommendations. Brokers have a duty to recommend investments that are appropriate for your financial situation, risk tolerance, investment objectives, and time horizon. Recommending speculative or high-risk investments to conservative investors is a violation of this duty.
• Churning and excessive trading. When a broker engages in excessive buying and selling in your account primarily to generate commissions, not to benefit your portfolio. Churning can be identified through turnover ratios and cost-to-equity analysis.
• Unauthorized trading. Making trades in your account without your knowledge or consent. This includes exceeding the scope of a limited trading authorization.
• Misrepresentation and omission. Failing to disclose material risks associated with an investment, or affirmatively misrepresenting the nature, risks, or expected returns of a product.
• Failure to supervise. Brokerage firms have a duty to supervise their brokers. When a firm fails to detect and prevent misconduct, the firm itself can be held liable.
• Elder financial abuse. Targeting elderly investors with unsuitable products, including variable annuities, non-traded REITs, and other complex products that are inappropriate for their age and financial needs.
• Ponzi schemes and investment fraud. Recovery actions against individuals and entities involved in fraudulent investment schemes.
• Breach of fiduciary duty. Investment advisers owe a fiduciary duty to their clients. When they put their own interests ahead of yours, they can be held liable.

The FINRA Arbitration Process

FINRA arbitration is mandatory for most disputes between investors and their brokers or brokerage firms. The process typically includes:

• Statement of Claim. A detailed written document outlining the facts, the violations, and the damages you are seeking. This is the securities equivalent of a complaint in court.
• Discovery. Document requests, interrogatories, and in some cases depositions. FINRA has specific discovery rules that are more limited than court discovery.
• Arbitrator selection. Parties participate in selecting the arbitration panel, which typically consists of one or three arbitrators depending on the amount in dispute.
• Hearing. A formal proceeding where both sides present evidence and testimony. Hearings are typically held at the FINRA hearing location nearest to the investor.
• Award. The arbitration panel issues a written award. FINRA awards are binding and enforceable in court, with very limited grounds for appeal.

Time Limits for Securities Claims

FINRA requires that claims be filed within six years of the event giving rise to the dispute. However, many securities fraud claims also have state statute of limitations that may be shorter. The sooner you act, the more evidence is available and the stronger your case will be.

Damages in Securities Cases

Investors who prevail in FINRA arbitration or securities litigation may recover compensatory damages (the amount lost due to the misconduct), interest, and in some cases attorney's fees and costs. Punitive damages are available in certain cases involving egregious misconduct.

What You Need for an Initial Assessment

To evaluate your securities claim, we will need your account statements (ideally covering the entire period of the relationship), trade confirmations, any correspondence with your broker or adviser, and the account opening documents. If you no longer have these documents, they can often be obtained through FINRA's discovery process.