You keep losing money, but your advisor keeps making money

Let’s face it, this has happened many times before and it will happen again. The question is: What will you do about it?

Stockbroker fraud is a term that can be used to broadly define the abuse of a customer’s

investment portfolio by a stockbroker and/or broker-dealer.

Examples are unauthorized trading (or frequent trading) of the account (churning) and the sale of unsuitable investments (individual stocks, futures, limited partnerships, annuities, and other unsuitable securities).

Most investors want to get their money back and not have to worry about being taken advantage of again. So they meet with brokerage firm representatives in an attempt to resolve their problems. We have seen many instances where clients, prior to engaging our services, have first corresponded with their brokerage firm’s legal department. Many times the financial advisor knows what he did was wrong, but does not want to own up to it.

What can investors do?

FINRA BrokerCheck Website Link This website will provide you with details regarding your broker’s and their firm’s history for free. Don’t be discouraged if you don’t find any details at first. It is just the first step.

Contact a lawyer as early as possible:

Just like any legal proceedings, there are time limitations that restrict how far back you can go; generally six years. Contact our law firm right away so we can help you determine how much you’ve actually lost and what you may be able to recover.


Virtually every brokerage firm in the country includes what is referred to as an “Arbitration Provision” on the back of the forms you sign on the day you open your account. Generally, this provision provides that if you have a dispute over your account, you waive your right to go to court and agree to arbitrate before FINRA arbitrators.

Arbitration is generally faster and less costly than court litigation. Most arbitration panels are comprised of 3 members. Two are deemed public and one industry (generally a current or retired broker). At the final hearing, after your case is presented and after the defense has presented their case, the arbitration panel will make a determination if you are entitled to any recovery, and if so, how much.

Generally, arbitration cases are resolved in 12-18 months from the time they are filed. However, luck may be on our side as, according to the Securities Arbitration Commentator, a periodical publication which has studied the statistics of securities arbitration cases, 80% of all customer cases settle in favor of the investor prior to the rendering of an arbitration award. Over half of the remaining 20% that do not settle prior to arbitration result in an award to the customer. Said another way, just less than half of the cases which go to arbitration result in an award in favor of the brokerage firm.

The expense of arbitration:

Attorney Fees: While there are always exceptions, we handle most of our cases on a contingent fee basis (meaning that our fee is paid as a percentage of the recovery, not on an hourly basis), so we are interested in pursuing only cases in which we believe we will likely be successful.

Costs: Our initial consultation is always free. In most situations we require the client to pay for the cost of an account analysis and the filing fee with FINRA. We will give you an estimate of the costs you may expect prior to incurring them.