As members of Financial Industry Regulatory Authority (FINRA), brokerage firms and stockbrokers are required to submit to binding arbitration as a way of resolving customer disputes. The FINRA arbitration dispute resolution process is designed to protect investors from stockbroker misconduct, or other sales practice violations, which results in investment losses. A brokerage firm’s failure to comply with FINRA rules and regulations concerning stockbroker misconduct can result in a claim for damages to recover investment losses.
The Financial Industry Regulatory Authority (“FINRA”) – created in 2007 through the consolidation of the National Association of Securities Dealers (“NASD”) and the New York Stock Exchange (“NYSE”) arbitration divisions – is recognized as the leading arbitration forum in the world for the resolution of investor complaints. There are certain activities in an investor’s account which are not suitable for most investors and should be considered as potential warning signs that require closer attention to your investment account including:
- Excessive trading (churning) resulting in excessive commissions.
- Misrepresentation or Omissions of Material Facts in a Prospectus, or by a financial advisor.
- Failure to properly register with the SEC or FINRA.
- Dramatic change in your portfolio composition.
- Advisor pressures you to act immediately to a recommendation.
- Securities concentration into a single security or investment product.
- Large purchases of securities on margin.
- A transaction history of selling winners and holding losers.
- Mutual fund switching between different mutual fund families.
- Variable annuity switching between different variable annuity contracts.
- Large amounts of life insurance or variable universal life insurance as a “retirement” plan.
- Customer denied access to branch manager.
- Account underperformance relative to the stock market.
- Guarantee of investment returns and guarantees against investment losses.
- Alternative or proprietary investments which fail to perform as designed or as marketed.
- Speculative options trading.
- False or exaggerated credentials.
The Silver Law Group has significant experience representing institutional and retail investors in claims against all of the Wall Street giants and many smaller brokerage firms. Our lawyers routinely represent investors for claims ranging from unsuitable investment advice to Ponzi schemes. Our cases have involved stocks, bonds, private placements, mortgage-backed securities, real estate investment trusts, and alternative investments. Several of our cases have received national and local press coverage and have been the subject of prestigious awards on behalf of protecting investors.
To learn more about FINRA’s investor protection activities concerning stockbroker misconduct:
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