Are You Looking For a Securities Fraud Attorney?
At Galvin Legal, PLLC, our top-rated investment fraud attorneys are committed to fighting for investors nationwide. We work aggressively to hold negligent and bad-acting brokerage firms and their financial advisors responsible for their misconduct. If you believe that you are a victim of investment fraud and would like to speak with a securities fraud attorney, please do not hesitate to contact us today for a free consultation with an stockbroker fraud lawyer.
Did you receive bad investment advice from your financial advisor? Did your financial advisor misrepresent the risks associated with any recommended investments? If so, you may be a victim of stockbroker fraud and you are not alone. Unfortunately, stockbroker fraud remains a very serious problem in the United States. While the exact figure is difficult to pinpoint, the Securities Investor Protection Corporation (SIPC) estimates that American investors are defrauded out of $10 billion to $40 billion annually. Galvin Legal, PLLC’s stockbroker fraud attorneys may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the brokerage firm that recommended the investment.
Securities can be very complex financial instruments. Due to their complexity, many investors often must rely on the guidance and professional expertise of a financial advisor or brokerage firm. Financial advisors or brokerage firms are regulated by the SEC, FINRA, and state regulators, amongst others, and they have a duty to oversee your accounts and only make recommendations that are suitable for the individual investor. Financial Advisors and brokerage firms who fail to provide investors with suitable recommendations when recommending securities may be held liable for any losses associated with their recommendations. Investors who suffer losses as a result of unsuitable recommendations by their financial advisor and/or brokerage firm may be able to recover their losses. It is important to hire an experienced stockbroker fraud lawyer when seeking to recover your investment losses.
Modern financial products can be complicated. There are a vast number of investments available, which can make it more confusing for individual investors. Stockbrokers and brokerage firms sometimes provide much-needed advice and recommendations. Investors put a lot of trust in the stockbrokers and brokerage firms they choose to work with and it is not unreasonable to expect that they will handle your hard-earned savings in a manner that is in your best interests. Stockbrokers and brokerage firms are required to handle their clients’ accounts responsibly and only to make recommendations that are suitable for each investor individually.
Investment fraud attorney, James P. Galvin, has handled numerous Financial Industry Regulatory Authority (FINRA) arbitration cases. These cases have included claims for, among other things, unsuitability, fraud, negligence, failure to supervise, and breach of fiduciary duty. In addition to practicing as a stockbroker fraud lawyer, Mr. Galvin has worked as a financial planner and previously held FINRA Series 6, 7, 63, and 66 Securities Licenses, as well as various insurance licenses. Mr. Galvin successfully completed The University of Georgia Terry College of Business Executive Program for Financial Planning Certification with Distinction. He has formerly been registered with broker-dealers in both the employee and independent contractor platforms. Mr. Galvin’s financial and securities industry background has given him a unique and valuable perspective in evaluating potential securities fraud claims and in understanding how brokerage firms typically defend fraud cases.
Galvin Legal, PLLC’s investment fraud lawyers may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the brokerage firm that recommended the investment.
Understanding Securities Laws and Regulations
The United States has a wide body of complex laws and regulations that are intended to protect investors from securities fraud. The Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940, and the rules promulgated by the United States Securities and Exchange Commission (SEC), all work together to protect the investing public.
State regulations also play an important role in protecting the rights of investors. State agencies regulate certain aspects of the industry within their jurisdictions. The Financial Industry Regulatory Authority (FINRA), the self-regulatory organization tasked with overseeing broker-dealers and their associated persons, has also enacted a number of rules that its members and their associated persons are required to follow. When customer disputes arise, the claim is generally brought in FINRA’s Dispute Resolution forum. Federal and state laws, and the rules and regulations promulgated by their agencies, work together to form the framework by which defrauded investors can seek compensation for their losses. Galvin Legal, PLLC’s stockbroker fraud attorneys have handled numerous securities and investment claims.
Common Securities Fraud Claims
It can be difficult to determine whether investment losses are a result of securities fraud, negligence, or other types of bad behavior, or whether the losses are simply due to normal market fluctuations. If you have suffered investment losses and are considering filing a securities fraud claim, it is important to thoroughly analyze your claim to determine whether you have a potential claim for which you may recover. Common types of disputes our securities fraud attorneys see include:
- Breach of Fiduciary Duty: The legal obligation that advisors act in the best interests of clients is known as a “fiduciary duty.” A claim for breach of fiduciary duty contends that the advisor’s actions were not careful or loyal to his or her client, and therefore, not in the client’s best interest. Firms are required to research every security it offers to ensure that it is a sound investment and that it is suitable for the firm’s client base. This is required to enable firms to maintain control of the products offered by their representatives and to properly supervise what products are being recommended to the firm’s clients. Firms are required to supervise their advisors and can be held responsible for investor losses as a result of their failure to supervise when advisors breach their fiduciary duty to clients.
- Misrepresentation or Omission of Material Information: Financial advisors are prohibited from omitting material facts or making misrepresentations about any investments they recommend. Even if it was an honest mistake, it does not excuse the fact that it caused you to suffer losses. You may be entitled to recovery of your losses whether the misrepresentation or omission was the result of mistake or fraud.
- Unsuitable Investment Recommendations: Not all investment opportunities are appropriate for all investors. Brokerage firms and financial advisors have a duty to only recommend investments that are suitable for the investor. FINRA Rule 2111 requires financial advisors and brokerage firms to have a reasonable basis to believe that any investment recommendations are suitable. If a broker recommends an unsuitable investment to an individual, then that person may be subjected to unnecessary risk and suffer losses.
- Over Concentration: Proper diversification is important to a well-managed investment portfolio. Unfortunately, many brokerage firms and financial advisors over concentrate investors in risky high commission paying investments that fail to properly diversify their portfolios. If your brokerage firm and financial advisor failed to properly diversify your portfolio, then you may be able to recover your investment losses.
- Churning: Churning occurs when a brokerage firm or financial advisor engages in excessive trading of securities with the primary purpose of generating commissions. If you think you may be a victim of churning, then you may be able to recover your losses.
- Failure to Diversify Investment Portfolio: “Don’t put all your eggs in one basket” is a common adage and describes the concept of diversification, and nowhere is it more applicable than in the world of investing. FINRA Rule 2111 requires brokers to recommend investments that are designed to suit the investor’s unique investment objectives and risk tolerance. In addition to the requirement that brokers only recommend portfolios designed to meet the unique investment objectives and risk tolerance of the individual investor, brokers are required to recommend investments that provide adequate diversification in their overall portfolios.
- Unauthorized Trading: Unauthorized trading occurs when trades are placed in an investor’s account without express and detailed permission to do so or without written discretionary authority. Brokerage firms and financial advisors must obtain approval from the account owner for every transaction unless the account owner has granted written discretionary authority in advance. If you suffered investment losses as a result of unauthorized trading by your brokerage firm or financial advisor, then you may be able to recover those losses.
- Excessive Trading: Churning or excessive trading occurs when a broker engages in excessive trading of securities in a customer’s account with the primary purpose of generating commissions. Brokers and brokerage should only recommend or execute securities transaction as part of a broader investment strategy. If a broker is trading for no other reason than to generate fees or commission payments, then they are engaged in churning, a clear violation of securities industry rules.
How to Find Out If You Have a Valid Investment Fraud Claim
Investment fraud claims are notoriously complex. For investors, it can be extremely difficult to know whether or not they have a viable claim. The single biggest question that you need to have answered is this: Did my investments simply lose money or am I a victim of investment fraud?
There are inherent risks involved with investing. It is your financial advisor’s job to understand the risks associated with his or her recommendations and to fully disclose them to you. Brokerage firms and their financial advisors are held to high professional standards of conduct. If you suffered investment losses because your brokerage firm and financial advisor recommended unsuitable or fraudulent investments, then you may be able to recover your losses.
When deciding whether you should contact an investment fraud attorney, ask yourself:
- Did you suffer losses in an investment you were led to believe was less risky than it was?
- Did you tell your financial advisor that you wanted “conservative investments,” only to suffer losses more in line with aggressive or speculative investments?
- Did your financial advisor pressure you into investing in an investment that you did not understand?
- Did your financial advisor promise or guarantee returns or protection of your principal investment that turned out to be untrue?
- Were any of the investments recommended to you misrepresented in any way?
What You Need to Know About Securities Arbitration and Mediation
Brokerage firms’ customer agreements almost universally contain mandatory arbitration clauses. Forced arbitration provisions are usually enforceable. This means that if you have a securities claim against your broker, you will need to bring your claim in FINRA Dispute Resolution forum.
This FINRA arbitration process is complex and it can be confusing. If you are considering filing for securities arbitration or making any type of claim against your broker or brokerage firm, you should obtain high-quality legal representation. You should hire a stockbroker fraud attorney who has extensive experience bringing claims in FINRA’s Dispute Resolution forum.
You Deserve Fair Compensation
If you are a victim of securities fraud, then you may be able to recover your investment losses. It is imperative that you are represented by a knowledgeable stockbroker fraud attorney. The securities fraud attorneys at Galvin Legal, PLLC are prepared to help you recover your investment losses.
At Galvin Legal, PLLC, our experienced securities fraud attorneys are committed to protecting the legal rights and financial interests of investors. We have helped many securities fraud victims recover losses.
Request a Free Consultation with a Securities Fraud Attorney
Galvin Legal, PLLC is a national securities arbitration, securities mediation, securities litigation, securities fraud, securities regulation and compliance, and investor protection law practice. For more information on Galvin Legal, PLLC and its representation of investors, please visit www.galvinlegal.com or call 1-800-405-5117.