I May Be a Victim of Securities Fraud. What Next?
Investors should keep track of their account statements and any communication they have had with their broker. Next, contact one of our securities lawyers and receive a free case consultation. Read more about how to prepare for FINRA arbitration.
If you were manipulated or deceived when you purchased a security and relied on your broker for recommendations, you may have a case. You may also have a case if your broker recommended an investment that they should have known did not fit your financial needs. Investors should also pursue claims if their brokers stole money, failed to repay a loan, or sold a security outside of their firm. Contact Kurta Law for a free case evaluation — you do not have to pay anything unless we win your settlement.
Every case is different, so estimating a reasonable settlement without knowing critical facts is impossible. For example, there are various measures of damages: What you lost and/or what you could have made if you had invested your money in a suitable investment. Speaking with a securities attorney is the quickest way to determine how much you could potentially recover. Our attorneys work on contingency, so there is no fee unless we recover money for our clients.
Brokerage firms have spent decades learning how to defend cases. We often see cases where firms persuaded investors to sign documents that they later use to defend their recommendations of risky securities. Your broker may have lied and contradicted their own disclosures. In some cases, we have successfully argued that the firm should have never created such an agreement. You may still have a case, and it’s free to speak with a securities attorney — don’t give up if you signed documents that seem to preclude any type of recovery.
The Financial Industry Regulatory Authority (FINRA) is a regulator that oversees stockbrokers and brokerage firms. It is called a “self-regulatory organization” because it is not regulated by any outside organization. FINRA does, however, fall under the oversight of the Securities and Exchange Commission (SEC).
Read more about how FINRA arbitration works.
The Financial Industry Regulatory Authority (FINRA) oversees brokers and brokerage firms. They investigate possible cases of broker and brokerage conduct. If FINRA uncovers fraud, they also issue broker fines and suspensions. They may also bar brokers permanently.
Investors typically sign pre-dispute agreements before they work with a broker, in which they agree to settle disputes through FINRA arbitration. FINRA provides neutral arbitration panels for investor disputes, and these panels typically have the final say in deciding investor awards.
FINRA BrokerCheck is a publicly maintained record of stockbroker misconduct. Investors can use their broker’s Central Registration Depository (CRD) number to look up their broker on BrokerCheck.
BrokerCheck contains a record of the following disclosures:
Investor complaints: Recommendations of unsuitable investments, misrepresentations, theft, forgery, and selling securities outside the firm, to name just a few common examples.
Regulatory actions: Allegations that the broker violated FINRA or SEC rules.
Criminal record: Any criminal charges. Investors should pay special attention to anything that involves theft, forgery, identity theft, or fraud.
Financial disclosures: Bankruptcies and financial compromises with the IRS appear in this section.
Employment: Record of terminations and voluntary resignations following allegations of misconduct.
How Does FINRA Arbitration Work?
FINRA arbitration hearings usually take place at the hearing location closest to the investor’s residence at the time of the events that gave rise to the dispute. The parties can also agree to a different hearing location.
Post-Covid, it has become increasingly common for arbitration hearings and mediation hearings to happen over Zoom.
No. Kurta Law is a national securities law firm, and we can handle cases in any state. We also take on international cases. We can travel to your state for in-person hearings.
There are benefits to FINRA arbitration as opposed to suing in civil court. The arbitration process is designed to be quicker and cheaper. This is partly because it is a less formal process with a simpler discovery process and no dispositions.
FINRA claims to provide a neutral forum and arbitrators for investors. Studies suggest, however, that arbitrators may side more often with brokerage firms. Your securities attorney can help level the playing field and select FINRA arbitrators with favorable track records.
Pre-dispute arbitration agreements state that FINRA arbitration is binding. FINRA arbitration awards are generally final and unappealable except under the most extreme circumstances. That means that any settlements you receive are most likely final.
Cases often settle before arbitration. Brokerage firms might choose to settle once they evaluate an investor’s complaint. Firms may also choose to settle before arbitration through mediation. Your securities lawyer can advise you on whether mediation or arbitration will get you the best settlement as efficiently as possible.
FINRA mediation is less formal than arbitration. Your securities attorney can help determine if mediation or arbitration is the better option for your case.
FINRA provides mediators to facilitate negotiations between investors and firms. Mediators help both parties arrive at a settlement amount that both parties deem acceptable.
Yes. Disputes often settle before arbitration hearings through mediation.
Costs and Fees Associated with FINRA Complaints and Arbitration
The cost to file a claim with FINRA depends on the size of the claim. For instance, the filing fee for claims from $100,000 to $500,000 is $1,425. Our firm will cover the cost of your filing.
Costs are typically nominal, like filing and printing costs. Kurta Law will cover these costs for you, but we will never cover costs without client permission.
Do I Need a Securities Attorney?
The legal profession has become highly specialized, meaning that attorneys typically handle cases in their area of practice. FINRA arbitration cases tend to be complex and have their own discovery process.
Keep in mind that the brokerage firm will have legal representation, and neither FINRA arbitrators nor staff can offer you legal advice.
Brokerage firms usually require you to sign pre-dispute arbitration agreements before they start working with you. If you signed one of these agreements, you would have to recover your losses through FINRA arbitration.
I Filed a Statement of Claim. Now What?
Filing a statement of claim is completely different from filing for FINRA arbitration. Filing a complaint or a statement of claim is only the first step. To reach a settlement, most claims end up in FINRA mediation or arbitration. These can be complex, highly specialized processes, and a securities lawyer can guide you through every step.
I filed a complaint against my brokerage firm, and they sent me a letter denying my claim. Does that mean I don’t have a case?
No. You could still have a case. When a firm denies a dispute, they are simply denying that their representative engaged in misconduct. Denials do not indicate FINRA or any third party has reviewed your claim.
Generally, it takes about a year from the date of filing. However, if our client is over 65 or has health issues, we file a motion for expedited treatment. We have had great success expediting cases.
This is never advisable. Do not meet with your firm without a lawyer. Firms sometimes meet with investors in an attempt to get them to sign forms that do not align with the investor’s best interests. Let your attorney advise you on any communications you have with the firm.
Do not speak to a member of FINRA enforcement without an attorney. Anything you say can be used against you in arbitration. We will help craft your response to FINRA to help ensure a positive outcome.
No, there is no public database for the filing of claims. Your FINRA arbitration will not be available to outside parties.
While every situation is different, our firm does not typically sue individual brokers. Rather, we pursue claims against the brokerage firms and the companies required to supervise them. Typically, the brokerage firm is liable for the damages, and the broker may be asked to contribute to the claim.
Brokers must follow strict rules when they borrow money from investors. FINRA Rule 3240 states that brokers can only borrow money from their investors if they follow their firm’s rules. If your broker is refusing to pay you back per the terms of your loan, they are almost certainly not following their firm’s policies. Contacting a securities attorney should be your next step.
About Kurta Law
Kurta Law has over 20 years of experience and an excellent track record, with over $150 million in investor settlements. Accolades from Super Lawyers and the Million Dollar Advocates Forum attest to their dedication. Founding partner Jonathan Kurta has defended brokerage firms and knows what tactics your opponent’s legal representation will use. Kurta Law only represents investors, and Jonathan Kurta works with PIABA to help create a fairer market for ordinary investors.
The Public Investors Arbitration Bar Association is an association of lawyers representing investors. They advocate for fair arbitration rules and promote the enforcement of rules designed to protect investor rights.
Our firm is extremely successful. We only take claims that we believe can recover substantial settlements, and we bet our fee on succeeding.
The best way to select a securities attorney is to read reviews and speak with your prospective securities fraud lawyer over the phone (or email) during a free case evaluation.
We work on contingency, which means we only earn a percentage if we can recover on your behalf. There is no upfront cost to you.
Other securities attorneys also defend brokerage firms. Our firm only represents defrauded investors in FINRA arbitration. We pride ourselves in always putting investors first.
We are always happy to provide our evaluation. Our firm will explore every angle of a case, and we have recovered millions of dollars for investors who had been told they did not have a case by other securities attorneys. You should always get a second opinion.