What to Know About Lincoln Financial Advisors Broker Fraud Arbitration

Investors may suspect broker misconduct when they notice their broker’s claims don’t match what they see on their account statements. The breach of trust caused by unsuitable investment recommendations, unauthorized trades, or misrepresentations of fact can leave investors unsure of where to turn.

The Financial Industry Regulatory Authority (FINRA) offers investors a streamlined alternative to civil court in the form of arbitration. Securities fraud attorneys help investors with Lincoln Financial Advisors broker fraud claims pursue damages through arbitration.

If you suspect broker fraud played a role in your losses, a structured account review from Kurta Law is the first step towards financial recovery.

Why FINRA Arbitration Instead of Civil Court?

Investors may assume that they have a lengthy court battle ahead of them when they first look into their options for financial recovery. Instead, most investors agree to pursue FINRA arbitration to resolve disputes when they sign brokerage account opening agreements.

FINRA arbitration presents a quicker and more economical option for investors. Arbitration differs from a civil proceeding in some key ways:

• No jury: You present your case to a panel of neutral arbitrators.
• Quicker resolution: Claims typically reach resolution in 12 to 18 months. This depends on the complexity of your case.
• Limited discovery: This process is more streamlined in arbitration.
• Restricted appeals: Investors have less ability to appeal the arbitration panel’s decision.
• Arbitration award: Your claim is resolved with a legally binding arbitration award.

Like in a civil case, Lincoln Financial Advisors may seek to resolve your claim through settlement. However, settlement offers do not indicate liability on the part of the firm. Similarly, previous Lincoln Financial Advisors settlements and arbitration awards involving other investors are not proof of firm liability.

If you believe you have a case for arbitration, reach out to the experienced investment fraud lawyers at Kurta Law for a free structured case evaluation.

Case Evaluation and Gathering Evidence for Your Claim

If you suspect broker fraud, your first step is a structured case evaluation by an investment fraud lawyer. They will examine your account documentation for red flags of broker misconduct and evaluate the strength of your claim.

Some of the documentation investment fraud attorneys may gather as evidence include:

• Monthly account statements
• Account opening documents
• Investor profile
• Trade confirmations
• Investment prospectuses
• Marketing materials
• Risk and strategy discussions
• Broker communications

These documents hold important information that can contextualize your broker’s conduct. In particular, your investor profile describes your risk tolerance, net worth, financial goals, and other facts that can support your claim.

The evidence gathered during this stage will form the foundation of your Lincoln Financial Advisors broker fraud claim. Thorough documentation will support a narrative of misconduct, and can be used to negotiate with Lincoln Financial Advisors if the firm makes a settlement offer during arbitration.

At this point, your securities fraud attorney will discuss your options and whether pursuing arbitration is the best avenue for recovery.

Filing Your Lincoln Financial Advisors Claim

The arbitration process truly begins when you file your Statement of Claim with FINRA Dispute Resolution Services. An investment fraud attorney can ensure that you file your claim correctly and pay the appropriate fees.

Your Statement of Claim will contain the following:

• A description of your allegations, presenting a clear timeline of events in detail
• FINRA Rules violated by this alleged misconduct
• Your requested remedies

Your Statement should contain as many details as possible, such exact dates and names. If you fail to include relevant information, you may waive your right to address those details during your hearing.

The requested remedies are what you seek to recover. This typically means damages, which should be directly related to your allegations of financial harm. In other cases, investors may request a return of misappropriated funds.

Lincoln Financial Advisors will file a Response within about 45 days of claim filing. This document outlines the firm’s defenses against your allegations.

Discovery: Trading Documents with the Firm

During the discovery phase, you and the firm will request and exchange documents. FINRA’s Discovery Guide describes the kinds of documents typically expected to be exchanged during discovery.

The extent of discovery is comparatively limited in FINRA arbitration, making it a quicker process overall. The document exchange stage typically lasts 6-9 months.

Settlement offers often occur during this time, as the firm gets a better understanding of the strength of your case.

Selecting Arbitrators

During this stage, FINRA provides lists of approved arbitrators to both parties. Arbitrators can be public or non-public, a distinction of whether they are familiar with the securities industry. Public arbitrators do not have a connection to the financial industry.

If your claim is for less than $50,000, you will select one arbitrator. Cases involving damages of more than $100,000 typically require three arbitrators. If your claim falls between $50,000 and $100,000, you have the option of either one or three arbitrators.

You and Lincoln Financial Advisors will submit your chosen arbitrators to FINRA and come to an agreement on who will be on the panel. This process generally takes one to two months to complete.

Your Lincoln Financial Advisors Arbitration Hearing

Unless your claim is resolved through settlement, it will progress to the hearing. FINRA arbitration cases typically go to hearing in 12 to 18 months following claim filing.

Before your hearing, you and the firm will meet to exchange exhibits, disclose the expert witnesses you will call, and share other information. This meeting occurs 20 days before your hearing, and may be held in-person or remotely, such as over the phone or Zoom.

Arbitration hearings follow the same basic structure:

• Opening statements from each side
• Presentation of evidence
• Witness testimony and cross-examination
• Closing arguments

This is your opportunity to use your evidence to demonstrate how your broker’s conduct led to financial harm. Your investment fraud lawyer will construct a narrative out of your documentation and use expert witness testimony to provide insight for the arbitration panel.

For example, an expert witness may provide testimony concerning how a structured product works and what type of investor it is suitable for to support your claim of unsuitable investment recommendations.

From start to finish, arbitration hearings typically last two to five days.

FINRA Arbitration Awards and Appeals

Arbitration panels issue their decisions within 30 days following a hearing. An arbitration award is a legally binding and enforceable agreement between you and the other party. Investors can only appeal these decisions in limited circumstances. 

Arbitrators may choose to award full or partial damages. Some claims may be denied completely, but this is very rare. The other party must pay the awarded damages within 30 days of notification of the award.

Evaluating Lincoln Financial Advisors Settlement Offers

Firms may make settlement offers anywhere in the arbitration process, even during the hearing itself.

Lincoln Financial Advisors may consider several factors when making settlement offers:

• Strength of your supporting evidence, typically revealed in discovery
• Credibility of your chosen expert witnesses
• Possible firm liability for supervisory failures under FINRA Rule 3110
• Potential for bad press

It’s important for investors to know that settlement offers do not equal an admission of liability or wrongdoing on the part of Lincoln Financial Advisors.

Do You Have a Lincoln Financial Advisors Broker Fraud Claim?

The investment fraud attorneys at Kurta Law have helped investors achieve recovery in diverse cases of broker fraud. We have experience evaluating investments as common as stocks and bonds and as complex as alternative investments.

Contact Kurta Law for a confidential structured account review and discussion of your next steps.