Florida Securities Fraud Attorney
If you suffered unexpected losses in your securities account, you should consider a free case evaluation with a Florida securities fraud attorney. In many cases of securities fraud, Florida brokers recommend products that come with too much risk for their clients. While some stock market losses are inevitable, clients who state that they want conservative investments should not have to worry about losing their entire investment. Unfortunately, unscrupulous brokers regularly exploit their clients and recommend risky securities for the sake of their own commissions and fees.
Florida State Securities Laws
Chapter 517 of the Florida Statutes addresses securities fraud. It also addresses how securities and securities transactions must register with the Florida regulator.
- Florida requires securities to be registered with the state unless they are exempt. An example of an exempt security is a security issued by a national bank or an annuity contract issued by a corporation or insurance company.
- There are a number of securities transactions that do not require registration with the state of Florida. These are detailed in Chapter 517.061 of the Florida Statutes.
Penalties for Securities Fraud Violations
Chapter 517.301 stipulates that it is against Florida law to engage in securities fraud, either by fraudulent transactions or concealment of facts. Violations of Florida Code 517.301 are third-degree felonies. If there are five or more victims and damages of more than $50,000, it becomes a first-degree felony, punishable by 30 years in prison.
However, many securities fraud cases are civil, not criminal cases. These civil cases are typically resolved via arbitration or mediation hearings. FINRA provides a platform for resolving disputes between investors and investment professionals.
What Types of Cases Does a Florida Securities Fraud Attorney Handle?
Ask any investment fraud lawyer: Florida securities statutes are not enough to protect investors from bad actors in the securities industry.
State securities laws often echo the federal rules and regulations under FINRA. They provide another layer of protection for state residents. For example, misrepresentation and omission are prohibited by FINRA Rule 2020, as well as Florida state securities statutes. Under both Florida statutes and federal securities laws, brokers are not allowed to misrepresent an investment – for instance, by stating a risky investment has very little chance of losing money.
Florida securities fraud attorneys at Kurta Law are experts in a wide variety and can answer any questions you may have. Below are just a few examples of common types of fraud and financial products in securities fraud cases.
- Many securities fraud cases revolve around unsuitable investments. The Financial Industry Regulatory Authority (FINRA) defines unsuitable investments as investments that do not suit an investor’s needs. Financial goals, risk tolerance, and tax status are all factors that brokers must consider. FINRA also prohibits investment strategies that come with excessive fees or that overconcentrate securities in one stock or sector.
- Variable annuities, non-tradable REITs, high-risk bonds, private placements, and alternative investments are all examples of investment products that are often unsuitable due to their high degree of risk. Brokers may overconcentrate an investor’s portfolio in these investments or recommend them in spite of their lack of liquidity.
- Florida has high rates of elder financial fraud. Unfortunately, brokers may take advantage of elderly investors by recommending especially risky investments. Exploitative brokers may also manipulate their elderly clients into opening a joint account or persuading them to make them a beneficiary of their will.
- Brokers might omit information about an investment’s fees for redeeming before a maturity date in order to make the securities trade seem more attractive.
Florida Securities Regulation
In Florida, securities fraud is investigated by The Florida Office of Financial Regulation (OFR). This office is part of the Financial Services Commission. The Commission is comprised of the OFR and another office: The Office of Insurance Regulation.
The OFR has a criminal justice arm called the Bureau of Financial Investigations. The Bureau employs experts in financial record analysis and forensic accounting. The Bureau may work with local, state, and federal law enforcement agencies. But as the agency notes on its website, the OFR is “not able to take action in every dispute, regardless of its merits.” The OFR recommends that investors who suffered losses seek the assistance of a Florida securities litigation attorney. Investors may also report complaints to the OFR via their online complaint form.
How to Recover Investment Losses
There are a few options for recovery. If an investor pursues FINRA arbitration, they may be able to earn an arbitration award or settlement from their brokerage firm. For more information about what information to gather for an arbitration claim, you may want to speak to an investment attorney. Florida has established a Securities Guaranty Fund. If a Florida resident suffers losses after working with a registered stock broker or investment adviser, they may be entitled to receive a payment to cover monetary damages.
Securities Law Enforcement in Florida
Securities regulators in Florida do not necessarily take regulatory action against offenders. Looking through the list of Florida regulatory actions for securities violations, many address allegations of selling securities without a license. Even in cases of egregious securities law violations, it may be the SEC or FINRA who brings the regulatory action before the state.
For instance, in July 2023 the SEC charged Dale Ledbetter with fraud following his alleged involvement with a $250 million alleged Ponzi scheme, 1 Global Capital. 1 Global Capital purportedly made short-term, high-interest loans to small businesses. Ruderman and the other officers allegedly took investors’ money and used it to fund their luxurious lifestyles. In September 2020, the SEC ordered Dale Ledbetter to return $2.9 million to defrauded victims and permanently barred him from the industry in October 2020. There is only one regulatory action on his BrokerCheck record from Florida – in 1980, Florida denied his license application following an alleged lack of evidence that he had received a passing grade on a qualification examination.
Broker and Investment Adviser Licenses in Florida
Brokers must have a license to sell securities in Florida before they engage in securities business.
Florida may revoke a license if the broker:
- Failed to deliver securities to their purchasers.
- Violates any federal or state securities or commodities law.
- Has had a final judgment entered against her or him in a civil action on the grounds of fraud, embezzlement, misrepresentation, or deceit.
- Made false statements on their application.
Why Do I Need an Investment Loss Attorney?
Florida investors may be surprised to know that they may not be able to sue their broker in civil court. Most investment contracts contain a “pre-dispute arbitration clause” that precludes an investor from suing a broker in civil court. Instead, investors must pursue a dispute resolution process called FINRA arbitration. In FINRA arbitration, an arbitration panel serves as the judge and jury for your case. FINRA provides the forum for arbitration, but the arbitrators are supposed to be neutral third parties.
Florida securities arbitration attorneys can provide expert insights when selecting your panel of arbitrators. Certain arbitrators demonstrate a financial industry bias and never side with defrauded investors. Securities attorneys know how to research arbitrators and exclude those individuals in the arbitrator selection process.
Arbitration hearings take place at the hearing location closest to you, or via Zoom. If you are ready to seek recovery for securities fraud, Florida has four offices for FINRA arbitration hearings: Boca Raton, Tampa, Jacksonville, and Orlando.
Who Are the Florida Securities Fraud Attorneys at Kurta Law?
Kurta Law is a national law firm with headquarters in New York City. Our experienced securities attorneys regularly secure settlements for Florida residents.
If you have questions before proceeding with your case, contact us for a free case evaluation: (877) 600-0098 or info@kurtalawfirm.com.