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Pearce Law Firm Client Wins $2.55 Million Against Investment Advisor

This was a sad case of financial abuse by an ex-spouse of another taken to arbitration by Robert Pearce and Adam Kara of The Law Offices of Robert Wayne Pearce, P.A.  (the “Pearce Law Firm”) for one of its clients. The Pearce Law Firm represented Elizabeth Snyder who filed claims against her ex-husband, Barry Snyder, for allegedly mismanaging her investment accounts through highly speculative, excessive and unsuitable trading strategy when he was employed as her stockbroker and later when he acted as her investment adviser at Glenwick Capital Holdings, LLC. In the Spring of 2015, in breach of his fiduciary duties as an investment adviser, Mr. Snyder allegedly misrepresented that Mrs. Snyder needed to transfer almost all of the Snyder Trust to a new investment vehicle, Linkster Holdings, LLC, for estate planning purposes when Mr. Snyder was about to be fired and become unemployable in the securities industry and setting up a “family office” to avoid registration with the regulators.  No one told Mrs. Snyder that he was fired and under investigation for misconduct even though he still continued to manage her accounts with the assistance of other employees at his former employer’s brokerage firm. Shortly after being terminated at that brokerage firm, Mr. Snyder caused Claimants’ accounts to be transferred to Montecito Advisors, Inc. and another brokerage firm where he allegedly crushed Mrs. Snyder financially through the same highly speculative, excessive and unsuitable at those brokerages.  Within a few short months, Mrs. Snyder’s life savings were wiped out. Mrs. Snyder alleged that Mr. Snyder’s actions were in contravention of his “fiduciary duty”  to act in his investment advisory clients’ “best interest” and industry standards of conduct such as FINRA Rules of Conduct 2110, 2111 (f/k/a 2310), and 2120, which state: 2110. Standards of Commercial Honor and Principles of Trade A member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. 2111. Suitability (a) A member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile.  A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.                                  * * * 2120.      Use of Manipulative, Deceptive or Other Fraudulent Devices No member shall effect any transaction in, or induce the purchase or sale of, any security by means of any manipulative, deceptive or other fraudulent device or contrivance.                                  * * * Mr. Snyder’s recommendations and trading in Mrs. Snyder’s accounts were allegedly breaches of FINRA’s suitability rule, which has long been applied to recommended “investments” and “investment strategies.”  Mr. Snyder allegedly misrepresented the “investments” and “investment strategies” to Mrs. Snyder as safe and suitable.  The over-concentration, over-leverage, and excessive risks taken in the accounts were allegedly not fully disclosed to Mrs. Snyder until it was too late. Mr. Snyder’s acts and omissions not only allegedly violated his fiduciary duties, the FINRA standards of commercial honor and principles of trade, but also included the alleged use of manipulative, deceptive, and fraudulent devices and other FINRA Conduct Rule violations. As we indicated above, Mr. Snyder lost every dollar in Mrs. Snyder’s accounts.  She was forced to sell her home, jewelry, etc. to support herself and children after the suffering the investment losses. No law firm other than the Pearce Law Firm was willing to take the case on a contingency fee basis, and we did so, successfully! The Pearce Law Firm sought an award of over $ 4,093,067 in market adjusted compensatory damages, or alternatively, $3,495,883 in net-out-of-pocket compensatory damages plus pre-judgment interest, attorney fees, expert witness fees, and costs. The arbitration award indicates the Panel was apprised of the amounts of settlements with other Respondents and requested to deduct those amounts from the compensatory damages before the award was entered. The Panel then entered an Award of $2,554,896 in compensatory damages but denied Claimants request for prejudgment interest, attorney fees, expenses, etc. Free Initial Consultation With Securities, Commodities and Investment Dispute Lawyers Serving Investors Nationwide If you have had your accounts mismanaged by Barry Snyder or any other stockbroker, investment adviser and/or trustee, and heard similar misrepresentations, received unsuitable recommendations, please call our office. The Law Offices of Robert Wayne Pearce, P.A. understands what is at stake in securities and commodities law matters and investment disputes, and works tirelessly to secure the best possible result for you and your case.  Mr. Pearce provides a complete case review, identifies the strengths and weaknesses of your case, and fully explains all of your legal options.  The entire law firm works to ensure that you completely understand the ins and outs of the legal process to give you complete peace of mind knowing that you have chosen the best possible representation for your case.

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Investors With “Blown-Out” Securities-Backed Credit Line and Margin Accounts: How do You Recover Your Investment Losses?

If you are reading this article, we are guessing you had a bad experience recently in either a securities-backed line of credit (“SBL”) or margin account that suffered margin calls and was liquidated without notice, causing you to realize losses. Ordinarily, investors with margin calls receive 3 to 5 days to meet them; and if that happened, the value of the securities in your account might have increased within that period and the firm might have erased the margin call and might not have liquidated your account. If you are an investor who has experienced margin calls in the past, and that is your only complaint then, read no further because when you signed the account agreement with the brokerage firm you chose to do business with, you probably gave it the right to liquidate all of the securities in your account at any time without notice. On the other hand, if you are an investor with little experience or one with a modest financial condition who was talked into opening a securities-backed line of credit account without being advised of the true nature, mechanics, and/or risks of opening such an account, then you should call us now! Alternatively, if you are an investor who needed to withdraw money for a house or to pay for your taxes or child’s education but was talked into holding a risky or concentrated portfolio of stocks and/or junk bonds in a pledged collateral account for a credit-line or a margin account, then we can probably help you recover your investment losses as well. The key to a successful recovery of your investment loss is not to focus on the brokerage firm’s liquidation of the securities in your account without notice. Instead, the focus on your case should be on what you were told and whether the recommendation was suitable for you before you opened the account and suffered the liquidation.

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FINRA Arbitration: What To Expect And Why You Should Choose Our Law Firm

If you are reading this article, you are probably an investor who has lost a substantial amount of money, Googled “FINRA Arbitration Lawyer,” clicked on a number of attorney websites, and maybe even spoken with a so-called “Securities Arbitration Lawyer” who told you after a five minute telephone call that “you have a great case;” “you need to sign a retainer agreement on a ‘contingency fee’ basis;” and “you need to act now because the statute of limitations is going to run.”

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A Stockbroker’s Introduction to FINRA Examinations and Investigations

Brokers and financial advisors oftentimes do not understand what their responsibilities and obligations are and what may result from a Financial Industry Regulatory Authority (FINRA) examination or investigation. Many brokers do not even know the role that FINRA plays within the industry. This may be due to the fact that FINRA, a self-regulatory organization, is not a government entity and cannot sentence financial professionals to jail time for violation of industry rules and regulations. Nevertheless, all broker-dealers doing business with members of the public must register with FINRA. As registered members, broker-dealers, and the brokers working for them, have agreed to abide by industry rules and regulations, which include FINRA rules.

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FINRA Arbitration in 2022: Disputes, Process, and Guide

If you lost money in the stock market because of your broker’s bad advice or careless investment practices, would you know where to turn for help recouping your losses? Robert Wayne Pearce and his team with the Law Offices of Robert Wayne Pearce, P.A., possess a tremendous amount of experience fighting for people just like you who pledged their hard-earned money to a securities broker or investment professional who lost most or all of their nest egg.  You might have a legal case if you relied on your investment professional to grow and protect your money but lost money instead. Taking on your broker and their firm is not easy. You need a tough, accomplished, and successful FINRA arbitration attorney who knows how to win by your side.  Below is a complete guide on FINRA Arbitration in 2022. In this guide, you will learn about FINRA and the steps you can take to help recover your losses. FINRA Overview FINRA, the acronym for Financial Industry Regulatory Authority, governs disputes between investors and brokers and disputes between brokers. In this article, we solely concentrate on how an individual private investor files a claim to recover losses against their broker or financial advisor.  We will explain how FINRA fits into the securities regulatory scheme. We will discuss how FINRA provides services designed to resolve disputes in a cost-effective manner that is quicker than a traditional court and give some insight into how FINRA‘s arbitration procedure works. Next, we will examine the pros and cons of FINRA arbitration. Lastly, we will discuss how a highly experienced lawyer who has represented numerous clients successfully at FINRA arbitration can help you recover your damages from your broker or financial advisor.  What Is FINRA? FINRA is not a government agency. Unlike the Securities and Exchange Commission (SEC), FINRA is an organization established by Congress to oversee the brokerage industry. FINRA is a self-governing body and operates independently from the U.S. government. By contrast, the SEC more broadly regulates the buying and selling of securities on various exchanges such as the New York Stock Exchange, NASDAQ, and the American Stock Exchange. The SEC approves initial public offerings and secondary offerings and can halt trading to avoid a crash if necessary.  Additionally, the SEC has law enforcement powers. Along with the FBI and the U.S. Attorneys Office, the SEC can investigate acts surrounding the buying, selling, and issuing of securities. The U.S. Attorney can pursue charges for crimes relating to the stock market, such as insider trading and wire fraud. While the SEC has the authority to file civil lawsuits against any person or organization violating the securities statutes and the SEC’s rules. How Is FINRA Different from the SEC? FINRA has a different function than the SEC altogether. FINRA is a regulatory agency designed to promote public confidence in the brokerage industry and the financial markets as well. People will not invest if they believe they have trusted unscrupulous financial advisors to protect their economic interests. FINRA ensures that its members comply with the ethical rules of their profession, similar to a state bar for attorneys or a board of registration for medical professionals.  Congress granted FINRA authorization to investigate complaints investors make concerning misconduct, fraud, or potentially criminal behavior. As a result, FINRA can discipline its members if the agency determines that a broker violated its professional code. FINRA can assess fines, place restrictions on a broker’s authority, or expel the member from its ranks for an egregious violation. Anyone who suspects their broker or their financial advisor of wrongdoing should file a complaint with FINRA’s complaint center for investors.  You should be aware that FINRA’s rules do not restrict you from filing a complaint seeking an investigation into wrongdoing and pursuing monetary damages in arbitration.  FINRA Alternative Dispute Resolution FINRA provides a forum for investors to resolve their disputes with their brokers or financial advisors. In fact, FINRA boasts the largest securities dispute resolution forum in the US. FINRA offers arbitration services, as well as mediation services, as a means to avoid costly and inefficient litigation in courts. FINRA provides a fair, effective, and efficient forum to resolve broker disputes. FINRA’s goal is to settle disputes quickly and efficiently without the standard procedural and discovery requirements that bog down cases filed in courts.  How Does Arbitration Work with FINRA? Arbitration is an alternative to filing a case in civil court. Arbitration tends to be less formal and is designed to process claims more quickly than filing a lawsuit in court.  FINRA’s arbitration process involves resolving monetary disputes among brokers and investors. FINRA’s arbitrators can issue monetary judgments and have the authority to order a broker to deliver securities to you if that is a just resolution of the case.  An arbitration hearing is similar to a trial in court. The parties admit evidence and argue their side to a neutral person or panel of arbitrators who will decide the case. The arbitrator’s decision, called an award, is the judgment of the case and is final. You should know that you do not have the right to appeal the award to another arbitrator. You may have an opportunity to pursue an appeal in court under limited circumstances. However, you cannot elect to arbitrate your case and then file a complaint in court seeking a trial on the issues decided by the arbitrator.  FINRA’s arbitration forum operates under the rules set forth by the SEC. FINRA ensures that the platform serves as it should and facilitates ending disputes. No member of FINRA participates in the arbitration. FINRA merely provides the forum and enforces the rules. Arbitrators decide the cases.  The arbitrators typically need about 16 months to issue an award. This is a lot quicker than court, where cases could take years to get to trial. The parties also have the opportunity to resolve the dispute by negotiating among themselves without going to arbitration.  FINRA’s Arbitration Forum Protects Investor Confidentiality Arbitration with FINRA is often confidential. The parties...

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How SEC Investigations Work: Process, Timeline, and Causes

You never want to be in the situation where the SEC is investigating you, but when they do, you must act quickly and decisively to minimize any harm. In this article, we’ll take a look at some of the most common reasons why the SEC might initiate an investigation into a company or individual, the SEC investigation process, how long SEC investigations take, and some steps you can take to protect yourself if it happens to you. What Causes an SEC Investigation? The SEC’s Division of Enforcement is in charge of investigating alleged breaches of securities law. Unregistered securities offerings, insider trading, accounting errors, negligence, market manipulation, and fraud are all common reasons for SEC investigations. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. The SEC may also investigate a company or individual if they receive a complaint from someone who has been harmed by the alleged violations. Note: If you are under investigation by the SEC, it’s generally safe to assume that you’re under investigation for or a witness to securities fraud. There are Two Types of SEC Investigations: The SEC can conduct two types of investigations: formal and informal. Informal Investigations: For a vast majority of cases, investigations are informal. An informal investigation is less formal and typically occurs when the SEC has general concerns about a company or individual’s compliance with securities laws. The focus of an informal investigation is broader, and the SEC typically relies on information provided by the company or individual under investigation as well as other sources such as whistleblowers. This means that the SEC staff will review the facts and evidence available to them and make a determination as to whether or not an enforcement action is warranted. Following an informal investigation, the SEC may choose to take no action, issue a warning letter, or file a formal enforcement action. Formal Investigation: A formal investigation is more serious and typically occurs when the SEC has specific evidence that a violation of securities laws has occurred. In a formal investigation, the SEC will often use its subpoena power to obtain documents and other information from the company or individual being investigated. The SEC generally reserves formal investigations for more-important matters involving large sums of money or a large number of investors. However, this isn’t always the case, and Enforcement Division staff may elect to pursue a formal inquiry in any situation where it appears that administrative, civil, or criminal fines might be appropriate. All SEC investigations are conducted privately. Facts and evidence obtained by the SEC during an investigation are not made public unless and until the SEC files a formal enforcement action. What Happens When You are Under Investigation? First, you will NOT be told you are under investigation by the SEC. But you will likely receive a letter from the SEC’s Division of Enforcement with a Subpoena requesting documents and/or requiring you to give testimony. At that point, you can request the opportunity to view the Formal Order of Investigation with a summary of the investigation underway. It is a very general description and rarely identifies who or what conduct is under investigation. In most cases, it is important to respond to the SEC as quickly as possible and to provide them with all of the relevant information. Failure to respond or provide false information can lead to civil and criminal penalties. It is strongly advised that you seek legal representation if you are under investigation by the SEC before you respond to the SEC’s letter. An experienced securities defense lawyer will be able to help you navigate the process and protect your rights. What are the Risks of Not Responding to an SEC Investigation? If you do not respond to an SEC investigation, the SEC may take enforcement action against you. This could include filing a lawsuit against you or seeking a court order requiring you to take specific actions such as making restitution to investors or ceasing and desisting from certain activities. The SEC may also seek to bar you from working in the securities industry or from participating in penny stock offerings if you are a registered person. How Long Do SEC Investigations Take? The length of an SEC investigation can vary depending on the facts and circumstances of the case. However, in most cases, the SEC will take a many months to investigate a company or individual before making a decision on whether to take enforcement action. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. Of course there are factors outside of the SEC’s control that can also affect the length of an investigation, such as the availability of witnesses or the need to gather evidence from foreign jurisdictions. You can learn more about the SEC’s enforcement process by visiting the SEC’s website. What Happens After an SEC Investigation? After an SEC investigation, the Enforcement Division will decide whether to take enforcement action. Of course, the ideal case (when the SEC has started an investigation) is to conclude the inquiry with no evidence of wrongdoing. However, if the SEC’s Enforcement Division decides to take action, the division will file a lawsuit in federal court. The SEC’s litigation is generally public, and the agency will typically issue a press release announcing its action. The press release will include a summary of the allegations and the relief being sought by the SEC. Defendants in SEC lawsuits have the right to be represented by an attorney and to file a response to the SEC’s allegations. The litigation will proceed through the court system, and a final judgment will be issued by the court. What’s a Wells Notice? If the SEC decides that they want to pursue a formal enforcement action against you, they will send you what is known as a Wells Notice. A Wells Notice is a formal notification from the SEC that they are considering bringing an enforcement action against you for violating securities law. It gives you an opportunity to respond to the allegations and to provide information in defense of yourself. This notice first comes...

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Did Your Broker Sell Your Stocks Without Permission?

You looked into your investment account and discovered that a number of your shares had been sold without your permission. You didn’t give the go-ahead, so you’re understandably confused, frustrated, and angry. What do you do now? First, you need to determine who sold your stocks. If it was your broker, you may be finding yourself asking whether or not your broker can sell stocks without your permission. Can my broker sell my stocks without permission? Your broker cannot sell stocks without your permission, unless you have given written authorization to do so. This is called unauthorized trading and not permitted under securities industry rules. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. However, while the appropriate authorization must always be obtained, a broker does not necessarily need to obtain express permission for every transaction. In this article we will review the two circumstances in which a broker may sell securities without prior notice to or consent from the client. Note: If you believe you have suffered losses on your investment as a result of unauthorized trading, you should speak to a stockbroker fraud attorney about your legal rights. Is Your Investment Account a Discretionary Account? The first instance when a broker may sell stocks without your permission is if they are trading in a discretionary account. A discretionary account is one in which the broker has the authority to make investment decisions on behalf of the client, without prior approval from the client. If you are unsure whether or not you have a discretionary account, you learn about the difference between a non-discretionary and discretionary account here. In order for a broker to sell stocks in a discretionary account, they must have what is called “discretion.” This means that the broker must have reasonable grounds to believe that the sale is in the best interests of the client. The key word in this definition is “reasonable.” This means that a broker cannot simply sell stocks without your permission because they feel like it. There must be a reason for the sale, such as an expectation of a market decline or other adverse event that could impact the value of the security. If you do not agree with a decision made by your broker in a discretionary account, you have the right to object and have the decision reviewed by a supervisor. Is There a Margin Call on Your Account? The second instance when a broker may sell stocks without your permission is in response to a margin call. A margin call is when the broker demands that the client deposit additional funds or securities to cover the cost of the stock purchased on margin. Technically, you probably gave him permission when you opened your margin account. If you do not meet the margin call, the broker has the right to sell the securities to cover the margin debt. This is done in order to protect the interests of the broker and the securities lending institution. Trading on a margin account is a risky investment and can result in substantial losses. For this reason, it is important to understand the risks before opening a margin account. You can learn more about margin trading on FINRA’s website. Get a Second Opinion: Contact an Stockbroker Fraud Lawyer Today If you have discovered that your broker sold stocks without your permission, you may be feeling overwhelmed and confused. You may be wondering what your legal rights are and whether or not you can take action. The best way to determine your legal rights and options is to speak with an stockbroker fraud lawyer. The Law Offices of Robert Wayne Pearce, P.A. specializes in representing investors who have suffered losses as a result of investment fraud. We offer free, no obligation consultations so you can learn more about your legal rights and options. Call us today at (877) 228-9395 to speak with an stockbroker fraud lawyer.

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What Does a Securities Lawyer Do?

If you’re having difficulties with your financial advisor or broker and suffered investment losses, you might want to hire a securities lawyer who knows the securities laws and securities industry rules inside and out.  Brokers and advisors provide investment advice and sell securities products such as stocks, bonds, and mutual funds. When you work with an advisor or broker, you probably signed an agreement that required them to comply with Federal and state securities laws and securities industry rules, including the rules requiring an advisor or broker to only make suitable investment recommendations and to act in your best interest. If your financial professional isn’t doing what was agreed to, or if you think they’ve committed securities fraud, you can file a complaint with the Financial Industry Regulatory Authority (FINRA). But before you do, you might want to talk to a securities lawyer. You have the right to seek compensation from the parties responsible if you were an investor who lost money as a result of broker misconduct. What Are Securities Laws? Securities laws are the laws that regulate the securities industry. The SEC (Securities and Exchange Commission) is the government agency that oversees the securities industry and enforces the Federal securities laws. These rules are designed to protect investors from fraud and other abuses, and to ensure that the securities industry operates fairly and transparently. Federal law requires companies that sell securities to register with the SEC. This registration process provides important information about a company’s business, its financial condition, and its management. It also gives the SEC important information about the people who sell the company’s securities. The federal securities laws also require those who sell securities to be licensed and to meet other standards of conduct. Investors and brokers use this information to make informed investment decisions. When brokers don’t disclose important information, or make false or misleading statements, they may have committed securities fraud. Further, the SEC provides a forum where investors can bring SEC complaints. The SEC may use these complaints to assist them in SEC investigations and the detection of securities fraud. What Does a Securities Lawyer Do? A securities lawyer specializes in securities laws and regulations that apply to investors, brokers, and financial advisors. Securities lawyers represent investors claiming losses as a result of misconduct or fraud, as well as brokers and financial advisors accused of misconduct by their clients or their employers. Investment Losses? Let’s talk. or, give us a ring at 800-732-2889. In comparison to other areas of the law in the United States, there are few securities lawyers. Most lawyers who practice in this area work for the government, regulating or prosecuting firms and individuals who have violated securities law. It’s Important To Find A Good Securities Lawyer Who Represents Investors! There are a few lawyers who represent investors in private lawsuits and arbitrations against firms or individuals who have committed fraud and violated other securities laws. In order to sue someone for securities fraud, you must be able to prove that they made false or misleading statements, and that you relied on those statements to your detriment. Proving fraud can be difficult, and you should talk to a securities lawyer before you decide whether to sue. If you are an investor who suffered losses due to broker misconduct, you have the right to seek reimbursement from the parties responsible. Broker misconduct exists in multiple forms, including: Breach of fiduciary duty; Failure to disclose a conflict of interest; Churning, also known as excessive trading; Lack of diversification; Failure to adequately supervise; Misrepresentation; Omission of material facts; Unsuitable investment recommendations; Unauthorized trading; and  Misappropriating client funds.  While some forms of broker misconduct are easy to recognize, others are not. A financial advisor who stole funds out of your account and transferred them to a personal account clearly misappropriated your funds and committed misconduct. It’s more difficult to prove that a financial advisor recommended unsuitable investments, however, because the suitability of an investment depends on a number of different factors.  If you suffered investment losses and believe it was a result of broker misconduct, contact a good securities fraud lawyer today to evaluate your case.  Securities Laws are Complex and Numerous The laws that govern the securities industry are complex and numerous. This is partially due to the fact that the securities industry is complex and ever-changing. As new technologies and products are developed, they must be regulated. And as the markets change and evolve, the rules must change with them. This complexity can make it difficult for investors to understand their rights and what they should do if they think their broker has committed securities fraud. Below are just a few of the securities laws that may be relevant to your case: The Securities Act of 1933 Often called the “truth in securities” law, the Securities Act of 1933 has two main objectives: To require that companies disclose important information about their securities before they sell them; and To prevent fraud in the sale of securities. You can read more about the Securities Act of 1933 here. The Securities Exchange Act of 1934 The Securities Exchange Act of 1934 is often called the “most important securities law in the United States.” It created the SEC and gave it broad authority to regulate the securities industry. Among other things, the Securities Exchange Act of 1934 requires companies that sell securities to the public to disclose important information about their business, financial condition, and management. It also requires brokers and dealers who trade securities to be licensed and to meet other standards of conduct. You can read more about the Securities Exchange Act of 1934 here. Trust Indenture Act of 1939 The Trust Indenture Act of 1939 is a federal law that regulates the sale of municipal securities. Municipal securities are debt obligations issued by states, cities, and other government entities. The Trust Indenture Act of 1939 requires state and local governments to disclose important information about their finances before they sell municipal securities. It also prohibits them from...

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How to File a SEC Complaint or Report Fraud Against a Broker

Your investments are important—that’s why so many individuals hire investment brokers and financial advisors to manage their investment accounts.  Having a qualified broker can be a great advantage to the growth of your investments. Unfortunately, however, investment and securities fraud remains a common and serious issue in the United States each year. So what do you do if you are a victim of investment fraud at the hands of your broker?  The U.S. Securities and Exchange Commission (SEC) has a mission of protecting investors; maintaining fair, orderly, and efficient markets; and facilitating capital formation. In furtherance of this goal, the SEC allows individual investors to file complaints against their broker or their broker’s firm. If your broker committed negligence or broker fraud, you may be entitled to file a complaint and recover your losses. Violations of securities law can be reported to the SEC, which will conduct a comprehensive investigation.  Looking for information on how to file an SEC complaint against a broker? Look no further than the Law Offices of Robert Wayne Pearce, P.A. Not only can our attorneys help you report your broker, but we can also help you recover your investment losses.  Filing a complaint against your broker with the SEC can be a great way to hold them accountable and put future investors on notice of their wrongdoing. However, doing so doesn’t necessarily help you get your money back. Contacting an attorney, however, can be the first step toward actually recovering your personal investment losses that you suffered at the hands of your broker.  Stockbroker fraud attorney Robert Wayne Pearce has over 40 years of experience handling complex securities, commodities, and investment arbitration and litigation cases. He has helped countless clients through their investment-related disputes, and he will fight to do the same for you. Please don’t hesitate to send us an online message or call (800) 732-2889 today for assistance. Why Would I File a Complaint? There are numerous reasons you may need to file a complaint with the SEC against your broker. Common examples of wrongful actions by a broker or brokerage firm include: Offering fraudulent or unregistered securities;  Misappropriating client funds; Insider trading; Making false or misleading statements; and Failing to file required reports with the SEC. Of course, not all actions by a broker constitute fraud for which you can file a complaint with the SEC. Remember, the stock market is inherently volatile, so the fact that you lost money does not necessarily mean your broker took any wrongful actions.  An experienced investment fraud attorney can help you determine whether filing a complaint with the SEC against a broker might be warranted. Filing a Complaint with the SEC Against a Broker: What You Need to Know If you suffer financial losses due to the negligence or misconduct of a broker or brokerage firm, filing a complaint with the SEC against the broker can be an important step to take.  Not only can this help prevent future investors from being subject to the same fraudulent and predatory actions, but it may also provide you with an avenue to recover your losses. How to File a Complaint Against a Broker The first step in reporting your broker for fraud or misconduct is to file your formal complaint with the SEC.  The SEC provides an opportunity for members of the public at large to submit broker complaints electronically using the SEC’s Investor Complaint Form.  What to Include in Your Complaint The Investor Complaint Form may appear simple to complete. However, there is more to it than you might think.  The form requires basic information such as: Your name and address; Basic information about your broker; The type of investment involved; A brief description of the events giving rise to your complaint; and Any actions you may have already to resolve your complaint against your broker, such as mediation, arbitration, or court action. The complaint form can play a vital role in whether the SEC allows your case to move forward. Thus, the more information you are able to provide, the better equipped the SEC will be to investigate your complaint. An experienced investment fraud attorney can be a great benefit to you as you complete your Investor Complaint Form and move forward in the process.  What Happens After Submitting My Complaint to the SEC After the SEC receives your complaint, they will thoroughly investigate your claim and all relevant evidence.  Central to the process is confidentiality. The SEC conducts its investigations in a manner that will protect the parties and preserve the integrity of the complaint process.  Then, depending on the allegations asserted in your form, the complaint will be referred to the appropriate SEC office. The Office of Investor Education and Advocacy The Office of Investor Education and Advocacy handles basic investor questions regarding securities law and complaints related to financial professionals. These SEC officers will also advise complainants of possible remedies and, in some cases, will intervene on your behalf and reach out to brokers or other financial advisors concerning the issues raised in your complaint. This office may also refer your complaint to another division of the SEC for resolution. Enforcement Division The Division of Enforcement, on the other hand, employs attorneys to review information and tips regarding securities law violations.  Officers in this office investigate the claims in their entirety, retrieving whatever evidence may be necessary. Again, it is important to note that the investigations conducted by the SEC are typically confidential unless made a matter of public record.  After completing a thorough investigation, the Enforcement Division may recommend that the SEC bring civil actions in federal court or before an administrative law judge to prosecute securities law violations.  Why Hire an Investment Loss Attorney to Assist with Complaints Against Your Broker? Reporting the fraudulent misconduct of a broker to the SEC is important. However, filing an SEC complaint is not the only way to hold a broker or brokerage firm accountable.  In fact, in some cases, filing an SEC complaint...

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What is the Difference Between Solicited & Unsolicited Trades?

Ideally, hiring a skilled broker takes some of the risk out of investing. Unfortunately, however, some brokers fail to act with the appropriate level of integrity. As an investor, it’s very important to understand the difference between solicited and unsolicited trades. The distinction has significant consequences on your ability to recover losses from a bad trade. What’s the Difference Between a Solicited and an Unsolicited Trade? The main difference between a solicited and unsolicited trade is: a solicited trade is a transaction that the broker recommends to the client. In contrast, an unsolicited transaction is one that the investor initially proposed to the broker. Need Legal Help? Let’s talk. or, give us a ring at 561-338-0037. In regards to solicited trades, the broker is ultimately responsible for the consideration and execution of the trade because he or she brought it to the investor’s attention. The responsibility for unsolicited trades therefore lies primarily with the investor, while the broker merely facilitates the investor’s proposed transaction. Why the Difference Matters The status of a trade as solicited or unsolicited is hugely important when an investor claims unsuitability. An investor who wants to recover losses may be able to do so if the broker is the one who initially suggests the transaction. Take the following example. You purchase $150,000 of stock in a new company. Shortly after the trade is complete, the stock loses nearly all its original value. As an investor, you will want to recover as much of that loss as possible. One way is to file a claim against your broker on the basis that the stock was an unsuitable investment. When you say that an investment was unsuitable, you are essentially saying that based on the information your broker had about you as an investor, the broker should not have made the trade in the first place. If the stock purchase was at your request—that is, it was unsolicited—then it’s unlikely you’d be able to hold your broker liable for your losses. After all, the trade was originally your idea.  If the stock was suggested to you as a good investment by your broker, however, then you may have an argument that you were pushed into a solicited trade that was not in your best interests. If this is the case, you would have a much stronger argument for holding your broker liable. What Is Suitability? The Financial Industry Regulatory Authority (FINRA) imposes rules on registered brokers to protect investors against broker misconduct. Under FINRA Rule 2111, brokers are generally required to engage in trades only if the broker has “a reasonable basis to believe that the recommended transaction or investment strategy involving a security or securities is suitable for the customer.” Whether an investment is suitable depends on diligent consideration of several aspects of a client’s investment profile, including: The investor’s age; Other investments, if any; The investor’s financial situation and tax status; The investor’s individual investment objectives; The level of investing experience or sophistication of the investor; The investor’s risk tolerance; and Other relevant information the investor discloses to their broker. When a broker makes a trade without a reasonable basis for believing that the trade is suitable, the broker violates FINRA Rule 2111. Investors may then be able to recover losses from the broker, and FINRA may impose sanctions, suspension, or other penalties on the broker. Broker Obligations to Their Clients When a broker conducts a trade on behalf of an investor, the broker uses an order ticket with the details of the trade. Brokers mark these tickets as “solicited” or “unsolicited” to reflect the status of the trade. For the reasons explained above, this marking is very important. On one hand, it protects a broker from unsuitability claims following a trade suggested by the broker’s client. On the other, it provides an avenue to recover losses in the case of a solicited trade that turns out poorly. FINRA Rule 2010 covers properly marking trade tickets. This rule requires brokers to observe “high standards of commercial honor and just and equitable principles of trade” in their practice. If a broker fails to properly mark a trade ticket, that broker violates Rule 2010. As an investor, you should always receive a confirmation of any trades your broker conducts on your account.  FINRA has found that abuse of authority by mismarking tickets is an issue within the securities industry. The 2018 report found that brokers sometimes mismarked tickets as “unsolicited” to hide trading activity on discretionary accounts. If your broker feels the need to hide a trade from you, that trade is likely unsuitable. How to Protect Yourself Against Trade Ticket Mismarking Whether your account is discretionary or non-discretionary, and whether you’re new to investing or a skilled tycoon, you should always pay close attention to your investment accounts. Carefully review your trade confirmations to make sure that all trades are properly marked. If you find a mistake, immediately report it to your broker or the compliance department of their brokerage firm. It’s their job to correct these mistakes and make sure they don’t happen in the future. Negative or suspicious responses to a legitimate correction request are red flags that should not be ignored. If you discover your broker intentionally mismarking your trade tickets, contact an investment fraud attorney immediately. Concerned About a Solicited Trade? The Law Offices of Robert Wayne Pearce, P.A., have been helping investors recover losses for over 40 years. We have extensive experience representing investors and have helped our clients recover over $160 million in total. If you’ve become the victim of unsuitable or fraudulent investing, we can help you. Contact us today or give us a call at 561-338-0037 for a free consultation.

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How to File a Formal Complaint Against Your Financial Advisor

When you hire a financial advisor, you expect the advisor to act in your best interest to prevent unnecessary losses. Unfortunately, however, financial advisors do not always live up to these expectations. In some cases, a financial advisor fails to follow an investor’s requests and guidelines or otherwise engages in misconduct, causing the investor to suffer losses. When this happens, the investor may be able to file an official complaint against the financial advisor through the Financial Industry Regulatory Authority (FINRA). In this article you will learn how to file a complaint against a financial advisor to recover your losses.

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How to Sue a Financial Advisor or Stockbroker Over Investment Losses

If you’ve lost a significant amount of money in your investment portfolios, you could be wondering if you can sue your financial advisor to help recover those losses. While every case is different, there are a number of factors that will influence whether or not you have a successful lawsuit. In this article, we will discuss some of the key things to consider if you are thinking about suing your financial advisor. Can I Sue My Financial Advisor? The short answer is yes, you can sue your financial advisor if you have suffered losses as a result of your advisor – or the financial institute they work for – actions or inaction. Securities and investment claims in the United States are usually resolved through FINRA’s arbitration procedure. Investment Losses? Let’s talk. or, give us a ring at 561-338-0037. Important: If you are considering suing your advisor, it is important to seek legal counsel. Do not file without legal representation. Securities is a complex area of law, and without an attorney, you may not be able to recover the full extent of your losses. A Financial Advisor’s Duty of Care People hire financial advisors and brokers to grow and protect their money. Financial advisors have advanced education and training, which should provide their clients with valuable insight and accurate financial advice. Individual investors expect that their advisors will not defraud or harm them in any other way. Market volatility is difficult to predict with any certainty. Markets dip and rebound over time. A financial advisor must guide you through those difficult times and offer you sound investment advice to minimize or avoid losses.  Some investments are riskier than others. Brokers and financial advisors need to understand their clients’ risk tolerance, as well as their clients’ investment needs. Losses could ruin years of hard work and financial planning.  Market volatility is one thing—negligence, deception, and fraud are something else entirely. Therefore, you should review your portfolio closely to see if you are a victim of misconduct.

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