Can a California Investor Sue a Broker or Financial Advisor for Investment Losses?
Yes. A California investor can bring a claim against a broker or financial advisor for investment losses caused by misconduct. Most of those claims proceed through Financial Industry Regulatory Authority (FINRA) arbitration rather than court, and the claim names the brokerage firm alongside the broker.
California securities statutes supply grounds that federal law alone does not. Talk with a California investment fraud attorney at Erez Law by calling 305-728-3320. The case review costs nothing.
California investors don’t lose money in a way that announces itself. The damage starts with a concentrated stock position, a margin loan taken against it, or a private placement sold as steady income. The loss surfaces on a statement months later, long after the recommendation.
Erez Law handles securities and investment fraud claims only. Our California securities fraud lawyers represent investors in Los Angeles, San Diego, San Jose, San Francisco, and across the state. We work on a contingency fee, so you owe no attorney fee unless we recover money for you.
Founder Jeff Erez built Erez Law around one practice: investor claims against brokerage firms and financial advisors. Our firm has recovered more than $400 million for investors and represented thousands of them nationwide. Founder Jeff Erez has tried securities cases to award in the FINRA forum, and our attorneys carry more than 65 years of combined experience in investor claims.
Do I Need a California-Based Investment Fraud Attorney?
No. FINRA assigns the hearing location closest to where the investor lived when the dispute arose, not where the law firm sits. A California investor represented by our Miami office still arbitrates in California. Securities arbitration experience changes outcomes; a local street address does not.
California carries some of the heaviest FINRA arbitration volume in the country, which means the hearing infrastructure sits close to most investors in the state.
Where Would My California Investment Fraud Case Be Heard?
FINRA maintains dedicated hearing locations across the state, each with its own arbitrator roster. Your case gets assigned based on your residence at the time of the dispute.
- Los Angeles, one of the busiest FINRA hearing locations nationwide
- San Francisco, serving Bay Area and Silicon Valley investors
- San Diego, covering the southern coastal counties
- Orange County and Central Valley investors, typically routed to Los Angeles or San Francisco
You can confirm current locations through FINRA’s hearing location directory. Panels draw from local arbitrator rosters, so the people deciding your case often live in your region even when your lawyer does not.
What Does Our Firm Handle Cases From Miami?
Everything except the hearing room itself, which happens in California. Our attorneys draft the statement of claim, run discovery against the brokerage firm, build the damages model, and prepare witnesses. We have brought claims against wirehouses, independent broker-dealers, regional firms and more.
Video conference hearings are now standard in the FINRA forum for many proceedings, which further reduces travel for investors and counsel alike.
Signs You May Have Been the Victim of Securities Fraud
Common signs that you may have been the victim of securities fraud include:
- The investment professional reports results that don’t make sense or that regularly miss publicly announced performance expectations.
- The financial professional fails to make timely disclosures of material information.
- An investment experiences a significant drop in value in a short period.
- You incur tax liability from an investment that appears to have lost value.
- An investment continues to drop in value despite the broader market gaining in value.
Every investment carries the risk of loss, and the vast majority of losses are not the result of fraud. However, if you suspect something is wrong with your portfolio, speak to a California investment fraud lawyer who can investigate your situation and explain your legal rights.
How a California Investment Fraud Attorney Can Help You
If you have experienced financial loss under suspicious circumstances, turn to a California investment fraud lawyer from Erez Law, PLLC, for help with:
- Investigating the underlying facts and circumstances of your case to recover evidence of investment or securities fraud
- Calculating the extent of your losses, including the loss of value in your investment along with other expenses you incurred as a consequence
- Determining what party or parties can be held liable for these losses
- Explaining your legal rights and options, including pursuing formal complaints with regulators or filing a legal claim for compensation
- Vigorously fighting for the maximum financial compensation you deserve
What California Laws Protect Investors From Securities Fraud?
California’s Corporate Securities Law of 1968 gives investors grounds beyond federal securities law. Section 25401 of the California Corporations Code bars anyone from selling a security in the state through an untrue statement of material fact or a material omission. A related provision supplies the remedy and reaches the brokerage firm behind the sale.
These state counts get placed inside the FINRA arbitration claim rather than filed separately in court. An arbitration panel awards relief under state statutes alongside common law claims.
| California statute | What it addresses | Effect on a California claim |
|---|---|---|
| Corporations Code 25401 | Selling or offering a security using an untrue statement of material fact or a material omission | Liability does not require proof that the seller intended to deceive |
| Corporations Code 25501 | The civil remedy for a 25401 violation | Allows a suit for rescission or damages, with rescission returning the purchase price plus interest at the legal rate, less income received |
| Corporations Code 25504 | Controlling persons and broker-dealers who materially aid a violation | Brings the brokerage firm into the claim, not only the individual broker |
| Corporations Code 25504.1 | Anyone who materially assists a violation with intent to deceive or defraud | Reaches third parties who helped place the product |
| Corporations Code 25506 | The filing deadline for these state claims | Five years from the act, or two years from discovery, whichever expires first |
None of this operates automatically. A defendant could raise reasonable care as a defense under Section 25501, and questions about who counts as a seller arise in most contested cases. Our California investment fraud lawyers plead state and federal grounds together so that a weakness in one count does not sink the claim.
Reach a lawyer for investment fraud at 305-728-3320 to have your account records read against these statutes.
Common Types of Securities Fraud Cases Our Firm Helps With in California
Our investment loss attorneys have extensive experience handling a broad range of securities fraud cases, including those that involve:
- Hedge fund fraud – Hedge funds are private funds in which managers are supposed to follow an investment strategy with money pooled from individual investors in the fund. When fraud occurs, hedge fund investors can suffer significant losses.
- Junk bond fraud – “Junk bond” is a colloquial term for corporate bonds issued by companies with subprime credit. Junk bond fraud may involve companies making inadequate or inaccurate disclosure, or it may involve fraud by bond funds that purchase junk bonds.
- Oil and energy investment fraud — This type of fraud usually involves failing to provide adequate disclosures to investors regarding the risk of investing in the oil and energy industry, primarily due to the sector’s volatility.
- Ponzi scheme fraud – A Ponzi scheme refers to illegal conduct by an investment fund (which may or may not engage in actual investing activity) that includes using new investment money to pay prior investors their dividends or distributions. New money is typically attracted to the fund through fraudulent promises and representations regarding the fund’s performance.
- Preferred shares of stock fraud – Fraud involving preferred equity can occur when stockbrokers or other financial advisors fail to warn investors about risks.
- Private placement fraud — This type of fraud involves emerging and non-public companies raising money that may include failing to make accurate disclosures regarding company performance or conflicts of interest.
- Variable annuity investment fraud – Variable annuity funds are financial instruments in which investors are paid an income calculated according to the performance of the fund’s investments.
- Stockbroker fraud and misconduct — This may include making recommendations and decisions that are not based on the client’s investment goals and strategy or that are intended to benefit the broker at the expense of the client.
- Elder financial fraud — Unscrupulous financial professionals often target elderly investors in the belief that they are more susceptible to fraud and less likely to notice or challenge it.
- EB-5 Immigrant Investor Program fraud – EB-5 visas are granted to foreign nationals who make certain investments in U.S. businesses that help facilitate job creation and economic growth. However, foreign nationals seeking an EB-5 visa may be defrauded of their investment by companies or other third parties.
How Large Does a California Investment Loss Need to Be?
Our firm reviews California claims involving investment losses of over $100,000. Losses at that level support the account analysis, damages modeling, and document discovery these cases require. We review your case for free.
That threshold reflects the cost of building a case, not the merit of the misconduct.
What Raises the Value of a California Investment Fraud Claim?
Claim value tracks the evidence more than the raw loss figure. Several factors move a case from marginal to viable.
- Multiple family or trust accounts affected by the same recommendations
- Commissions, sales charges, and surrender penalties layered on top of the loss
- A broker with prior customer complaints on the public record
- Written communications showing what the broker actually represented
- An investor over 65, which may open California elder financial abuse grounds
Investors routinely undercount their own losses by reading only the closing balance. You can check any broker’s complaint and disciplinary history yourself through FINRA BrokerCheck before you call anyone.
How Long Do You Have to File a California Investment Fraud Claim?
Two clocks run at the same time, and the shorter one controls. FINRA Rule 12206 bars arbitration claims filed more than six years after the events behind the claim. California Corporations Code Section 25506 cuts off state statutory claims five years after the act, or two years after you discovered the facts, whichever expires first.
Federal claims carry their own separate deadlines, which sometimes run shorter still.
Why Does the Discovery Date Create Problems?
The two-year discovery clock starts earlier than most investors expect. Courts have treated notice of suspicious circumstances as enough to start it, not proof of fraud. An unexplained statement, an unanswered question, or a broker’s evasive email counts.
That reading rewards delay by the other side. Investors who wait for certainty before calling a lawyer sometimes lose the stake count while the FINRA window remains open.
What Records Help Preserve a California Investment Fraud Claim?
Documents in your possession establish both the misconduct and the discovery date. Gathering them early gives an investor fraud attorney a firmer read on which deadlines apply.
- Monthly and annual brokerage account statements
- Trade confirmations and any new account paperwork you signed
- Emails, texts, and letters exchanged with the broker or advisor
- Notes or calendar entries recording investment conversations
- Any prospectus, offering memorandum, or risk disclosure you received
How Much Are California Securities Fraud Attorneys’ Fees?
You will not have to pay any money upfront when you hire a California investment fraud lawyer from Erez Law, PLLC. Our firm handles securities fraud cases on a contingency fee basis, which means we are paid a fee only when we recover compensation for you. Depending on the circumstances of your case, you may also be entitled to pursue fee shifting under state or federal securities laws, which means that the losing defendant or defendants would be obligated to compensate you for your legal fees and costs.
Ask Erez Law
Can I sue my financial advisor in California for losing my money?
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Talk to Our California Investment Fraud Attorneys Now
If you’ve been the victim of investment fraud, contact the California securities fraud attorneys of Erez Law, PLLC, for a free initial consultation. We represent victims of investment disputes throughout Los Angeles, San Diego, San Jose, and across California. We will work tirelessly in pursuit of financial compensation for your investment losses.