Have you lost money in the market because of wrongdoing by your financial adviser or broker?
Many investors pay financial professionals – like brokers or financial advisors – to handle their investment decisions because they don’t have the expertise to manage their money on their own. They trust these financial professional with some of the most important financial decisions in their lives, including decisions relating to their retirement savings and savings for college for their kids.
Unfortunately, sometimes financial professionals abuse the trust placed in them by their clients. They hide conflicts of interest, overcharge for their services, or place their clients in totally unsuitable investments. Some examples of stock fraud include:
- Churning: Brokers excessively trade on your account in order to generate commissions for themselves;
- Breach of fiduciary duty: Your financial advisor has a fiduciary duty to you and is required to put your interests above his own. Even in states where financial advisors are not considered fiduciaries, there are laws that require them to always act in the best interest of their clients. Some examples of breach include: failure to consider the suitability of investments; failure to conduct due diligence when advising you; failure to charge fair prices; and failure to make adequate disclosures to you;
- Failure to supervise: Brokerage firms are responsible for the acts of their brokers with respect to investors. They must exercise adequate supervision over their brokers to ensure that their clients are best served. If firms fail to properly train their brokers, fail to confirm the suitability of investments, or fail to confirm that you were provided accurate information, then the firm may be liable;
- Fraud and misrepresentation: Sometimes brokers just lie to and steal from their clients. They make false representations that investors rely on that result in significant financial losses;
- Unsuitability: Your financial advisor has a duty to – after accounting for your income, age, stage in life, and investment goals – to recommend investments suitable for your particular situation. For example, a broker who recommended to a retired couple a strong concentration of assets in speculative stocks may be liable for damages resulting from such unsuitable investments; and
- Overconcentration and failure to diversify: Related to unsuitability, brokers who fail to diversify your portfolio across asset classes (and within asset classes) may be liable for resulting damages.
Madia Law Recovers for Investors
The Financial Industry Regulatory Authority (FINRA) handles most claims by investors against brokers and firms through mandatory FINRA arbitration. The advantage of arbitration is that you will get a final result on your case much faster than through normal civil litigation, and there will be very limited appeals. The disadvantage of FINRA arbitration is that you will not have the opportunity to have your case decided by a jury – rather, a panel of arbitrators will hear the case and make the final decision.
After you retain Madia Law, we’ll file a Statement of Claim with FINRA that explains the facts and seeks relief. We’ll then rank a list of potential arbitrators provided by FINRA – the other side will do the same. After the panel is selected, we’ll set a discovery and hearing schedule. Both sides provide each other with certain documents necessary for the case. There may be some motions practice, followed by the hearing on your case in front of the arbitration panel.
The arbitration hearing is the “trial” – and the same skills that make us exceptional trial lawyers transfer over to these hearings. We prepare for the hearing from Day 1, and our closing argument drives our Statement of Claim and discovery process. We take great pride in our ability to push matters all the way through final hearing if brokers and firms are unwilling to do right by their clients.
Sometimes, however, brokers will settle after they’re convinced that we’re going to beat them at arbitration. For example, we recovered nearly $100,000 for an investor who’s broker over-concentrated his portfolio in gold at a settlement conference just one month before the final arbitration hearing.
Madia Law Bills on Success
We thrive on flexible fee agreements tied to our success. We’ll work with you to craft a fee agreement that ties success to fees, including contingency fee agreements.
