Broker-Dealer, SEC & FINRA Investment Disputes

Professionals employed in the securities industry often have employment-related issues subject to mandatory arbitration administered by the Financial Industry Regulatory Authority (FINRA). FINRA employment disputes frequently involve wrongful termination, unpaid bonuses, unpaid commissions, overtime pay violations, non-compete and non-solicitation agreements, defamation, and trade secret violations. Some employers in the securities industry attempt to terminate employees just before large bonuses are paid in an effort to avoid payment, thereby depriving some employees, such as investment bankers, of the bulk of their annual compensation.

Investment brokers and brokerage firms oftentimes believe they are free from blame if a client of theirs loses money in an investment they brokered. However, in many instances, brokers and their firms have a heavy hand in contributing to or causing the losses suffered by their clients. Regardless of market fluctuation, brokers and their firms have a duty to their clients to prevent any of the following things from happening — any one of which can cause an otherwise promising investment to result in large losses for an investor:

  • Negligence in improperly steering a client into an unlawful, unsound, or unsuitable investment;
  • Churning in charging a client excessive fees that add to a broker’s/brokerage firm’s profits but which needlessly eat away at the investor’s anticipated investment return;
  • Negligent hiring, retention and supervising in failing to hire properly trained brokers or adequately train and/or supervise the brokers responsible for handling a client’s investment portfolio, including making sure that investment brokers are not conducting unauthorized or illegal trades using an investor’s funds;
  • Negligent and/or fraudulent misrepresentation in making misstatements to investors about what they are investing in, what the investors’ realistic investment return might be, and whether the investment is suitable for the investors’ financial objectives; and
  • Professional irresponsibility in failing to listen to a client and stop any client harm before it becomes financially devastating.

When brokers and their firms cause harm to their clients through acts such as those outlined above, the clients have a right to seek recovery from the brokers/firms for their wrongful acts. Securities arbitration is how most disputes between investors and their brokers/brokerage firms are resolved. The attorneys at Zagrans Law Firm represent the individual and institutional investors in such proceedings across the country.

Securities arbitration affords customers considerable advantages. The process is considerably more expeditious, less costly, and less burdensome than court litigation. Though arbitration is often perceived to be an informal process, securities arbitrations are actually highly specialized proceedings. Our attorneys use their knowledge, creativity, and experience to devise an individually-tailored approach to each client’s case as a way to maximize each client’s opportunity to recover his/her losses.