4 Points to Consider When Bringing a Suit Against a Securities Broker

The standard broker-customer agreement usually states that disputes between the client and broker, including claims of fraud, will be settled through arbitration rather than litigation. This arbitration, which will be filed with FINRA (Financial Industry Regulatory Authority), does not involve a judge or jury, but instead allows an arbiter to hear your case in a faster and more economical process.

If you are bringing a claim against your broker or brokerage firm, you should keep the following four pieces of information in mind:

  • You do not want to wait to bring your suit. FINRA rules state that: “no claim shall be eligible for submission to arbitration under the Code where six years have elapsed from the occurrence or event giving rise to the claim.” However, it is unclear whether this means that you have six years from the beginning of the fraud took place, or six years from the discover of that fraud. In addition, many broker-customer agreements also state a length of time in which you can file a claim that is shorter than six years. For these reasons, it is vital that you speak with a investment fraud attorney as soon as possible after discovering that you may be the victim of fraud.
  • Collect all available evidence. Very simply, you will not be able to win your suit without evidence of fraud. While in-person meetings and telephone conversations of the past won’t be of help, you can find a great deal of information in your client file, which you should request from the firm. Your file will include general paperwork, research reports, and order tickets, among other documents. In addition, more pertinent information may be found in employee files, monthly statements, and transaction confirmations. Your attorney can help you locate and analyze these documents.
  • Consider mediation. Mediation is an alternative to arbitration that has a number of advantages in certain types of cases. Mediation may be a good fit for your suit if both you and the broker are cooperative, if you would like a faster and less expensive option, and if you would like to have more control over the decision. If mediation does not work, you can fall back on arbitration.
  • Name all responsible parties. It’s a common misconception that only your broker is responsible for fraud, or that one party should take all of the blame. In these cases, it is not uncommon for other people and entities to be responsible as well, including the account executive who was supervising the broker and the brokerage firm itself.

Bringing a suit against a securities broker can be confusing, stressful, and overwhelming. We are here to guide you through every step of the process and to get you the compensation and justice that you deserve under the law. Contact us today to learn more about our services or to schedule a consultation with one of our attorneys.

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