Frequently Asked Questions

Investors who have lost retirement savings or other assets because they relied on the advice of a stockbroker often are embarrassed about the losses. If you are afraid of the prospect of filing a lawsuit or concerned about entering an arbitration claim to recover your losses, we can help. The questions and answers set forth below are intended to address your concerns and to clarify what is involved in asserting a claim.

Q. How do I know if I have a claim worth pursuing?
A. An important first step in determining whether you have a claim worth pursuing is to consult with an attorney with experience in representing investors in securities arbitration proceedings. Generally speaking, investors are unable to make this determination on their own. Suffering losses in the stock market, annuities, or other investments does not necessarily mean that you have a valid claim to assert. However, there are many types of broker or investment advisor misconduct which can provide a basis for seeking the recovery of your losses. Some of the most common types of broker misconduct are described on the stockbroker misconduct page on this website.

Q. Can I sue my broker even if he did not misrepresent anything?
A. Yes. It is a common misconception of investors who have suffered losses as a result of relying on the advice of their stockbroker that their broker must have deceived them in some way for their losses to be recoverable. That is simply not the case. FINRA has established detailed conduct rules for brokers and their brokerage firms, which set forth standards of conduct with which brokers and their firms must comply. Those rules require, among other things, that brokers get to know their customers, including their financial status, investment objectives, and risk tolerance, and to recommend only those investments which are consistent with their client's profile. The failure of a broker or brokerage firm to comply with these securities industry rules can be the basis of a negligence claim against the broker and his firm.

Q. How do I know if I have been the victim of stockbroker or investment advisor misconduct?
A. Because of the complexity of the rules and laws governing the conduct of stockbrokers or investment advisors, an investor often has difficulty determining if he or she has been the victim of actionable stockbroker misconduct. Listed below are a few warning signs of possible broker or investment advisor misconduct:

• Your financial advisor does not return your telephone calls;

• Your financial advisor repeatedly advises you to "stay the course" when your investments continue to decline in value;

• Your financial advisor fails to tell you about important, negative information concerning an investment before it was purchased;

• You review your account statements or confirmation slips to discover that there are investments on them that you did not know about before they were purchased;

• There are numerous purchases and sales of investments on your account statements each month;

• Your account statements reflect a debit balance or the use of margin to purchase investments when you did not know you were borrowing money to purchase investments;

• Your broker advises you to purchase investments that you do not understand or that he cannot explain to you; or

• Your investments continue to decline in value despite assurances from your broker that his investment strategy is conservative or low risk.

These are only a few examples of circumstances suggesting possible broker misconduct. If you recognize any of these circumstances, you should immediately seek the advice of an experienced securities arbitration attorney.

Q. How long do I have to make a claim?
A. If you believe that you might have been the victim of broker or investment advisor misconduct, you should consult with a qualified attorney as soon as possible. Each state and the United States Congress have adopted statutes which set forth the time periods that you have to assert a claim. These statutes are known as "statutes of limitation". If you wait too long to assert your claim, your claim may be barred by the applicable statute of limitations.

For example, under Florida law, an aggrieved investor has four years in which to assert a claim for fraud or constructive fraud, starting from when he or she knew or reasonably should have known that he or she had been defrauded. The statute of limitations under Florida law to assert a statutory securities fraud claim under Chapter 517 of the Florida Statutes is shorter. An aggrieved investor must assert such a claim within two years of the date on which he or she knew or reasonably should have known of the fraud. Such a statutory claim must be asserted no more than five years from the date of the investment at issue.

Q. How does an attorney decide whether I have a case?
A. There are a number of factors that need to be considered in evaluating an investor's potential claims. Detailed information about the investor's background and his or her dealings with the stockbroker and the brokerage firm needs to be obtained from the investor. In addition, all documents related to the investor's accounts with the broker and the brokerage firm must be reviewed. There are three basic questions that need to be answered:

• How bad is the conduct of the broker or the brokerage firm that caused the investor's losses?

• What amount of money did the investor lose as the result of the broker misconduct? and

• Is the brokerage firm for which the broker works financially solvent so that, if an award or judgment is obtained in favor of the investor, the brokerage firm has the assets to pay the award or judgment?

Q. How will attorney's fees be handled?
A. I represent clients pursuing securities claims on a contingent fee basis. If a client's claim is settled with the payment of funds by the broker or brokerage firm to the client or an arbitration award is obtained in favor of the client, which is paid, then my firm and I receive a percentage of the amount recovered in payment for our services. If a client obtains no recovery, no attorney's fee is due to my firm or me. There are some costs associated with asserting a securities arbitration claim, which include a filing fee, expert witness fees, long distance telephone charges, and photocopying expenses. My clients are responsible for the payment of those costs regardless of the outcome of their case.

Q. How does the arbitration process work?
A. For a detailed explanation of the arbitration process, see the page covering the securities arbitration process on this website.

Q. How likely is it that I will win my case?
A. As with life, there are no guarantees with securities arbitration. Predicting the outcome of a securities arbitration proceeding is not possible. Statistics reveal, however, that approximately 80% of all customer cases filed are settled before the case is presented to the arbitrators at a final hearing. Although settlements are confidential, the settlement of a customer claim in the vast majority of cases involves payment to the investor by the broker or the brokerage firm at least a portion of the investor's losses. I examine a potential client's claims carefully before I agree to represent the client in pursuing his or her claims. My agreement to represent a client demonstrates my belief that his or her claims have merit and that the broker and his firm should be required to pay some or all of the client's losses.

Evaluating Your Claim
If you are uncertain whether your investment losses may have been due to some form of stockbroker misconduct, we can help. Contact me for an evaluation of your potential claim. I will assess the merits of your case and if appropriate, arrange a consultation to discuss your options. There is no charge.