Investors work with a financial adviser or stockbroker because they feel their finances are in good hands. But many advisers abuse their position as fiduciaries to increase their own profits at their clients’ expense. With your investments and savings on the line, you should choose a securities arbitration attorney with the requisite experience and securities industry knowledge needed to combat the brokerage firm’s “hired gun” lawyers.
Securities regulations revolve around the “fiduciary duty” that advisers and brokerage firms owe their clients. This duty arises out of financial professionals’ superior financial knowledge compared to the average investor, and the resulting potential for abuse. A fiduciary duty requires advisers to act in their client’s best interests.
Investors may not know it, but in most cases they sign away their right to a trial by jury when they open an account for a securities firm’s brokerage services. Instead, securities firms will typically require their customers to agree to arbitrate any issues before the Financial Industry Regulatory Authority (FINRA).
FINRA is a self-regulatory organization responsible for promoting securities market integrity and resolving disputes between public investors, member firms, and firm employees. At the end of an arbitration proceeding, an arbitration panel issues a binding decision, which may include a monetary award to the investor as compensation for any investment losses resulting from broker misconduct. Arbitration awards are difficult to appeal, providing aggrieved investors comfort from the long, protracted process often present in typical court proceedings.
FINRA arbitration usually takes a little over one year from the time the claim is filed until a decision is reached. Importantly, FINRA requires a claim to be filed within 6 years from the time the alleged misconduct occurred, and oftentimes even sooner. Morganti & Co., P.L.C. has represented European and U.S. resident investors in a wide range of advisor misconduct claims, including unsuitable investments, excessive trading/churning, unauthorized trading, and negligence against multi-national brokerage firms.
Advisers owe their investment clients a duty of loyalty and good faith when researching and recommending portfolio products. Because no two investors—and no two investment products—are identical, investment fraud claims must be evaluated on an individual basis.