Protect Your Investment With a Securities Arbitration Lawyer

Securities Arbitration Lawyer

In the United States today, more and more forms of alternative settlement procedures have become popular.  This is not only seen in the New Jersey legal field, but also in the financial field.  When a brokerage firm enters into an agreement with a client to handle their investments, the contract often includes an arbitration clause.  This is results in clients, usually unknowingly, waiving their right to sue their investment broker if the investment is mismanaged. 

While arbitration is still an avenue to recover lost funds, participating in arbitration without a skilled securities arbitration lawyer could result in financial ruin.  This article outlines the importance of legal representation in securities arbitration and the benefits of being expertly represented.

Common Claims that lead to Securities Arbitration

Investments and the financial field can be extremely complex and take years to understand.  Because of this, many investors are required to depend on their broker, who is more knowledgeable in the field, to help make intelligent investment decisions.  A violation of trust and regulations brokers are required to follow, can result in severe financial implications.

The primary question most security arbitration attorneys ask their clients is, "Did your investment lose money?" and "Were you the victim of misconduct?"  The most common forms of misconduct are:

  • Breach of fiduciary duty
  • Undisclosed conflict of interest
  • Failure to supervise investment agents
  • Negligence
  • Misrepresentation or fraud
  • Failure to provide material facts
  • Inappropriate investment recommendations
  • Selling unregistered securities
  • Ponzi schemes
  • Being pressured to take on too much risk
  • Churning, also known as excessive trading
  • Charging unreasonable or hidden fees

Although this list is not exhaustive, these are the most common forms of brokerage misconduct.  An individual who falls victim to one or more of these events, most likely must appear for securities arbitration and should hire a securities arbitration attorney immediately.

What is Securities Arbitration?

While securities arbitration is generally less expensive and faster than a typical trial, the client should read through the securities arbitration agreement as they are usually written in favor of the brokerage firm.  In addition, the Supreme Court of the United States has held that arbitration agreements are valid by any transaction completed under the broker-investor relationship.

Securities arbitration is governed by the Financial Industry Regulatory Authority (FINRA), which is a self-regulatory body that creates rules for members of the financial industry to follow.  A list of potential security arbitrators will be provided to both parties.  These arbitrators act like a judge or final decision maker.  Ultimately three must be chosen that will hear your case and make their final decision.

How Securities Arbitration Lawyers Can Help

The FINRA securities arbitration process is extremely complicated and deals with proving elements that only the most experienced securities arbitration lawyers are skilled in.  The consequences of an unsuccessful verdict can be even more damaging because your appeal rights are extremely limited in the securities appeal process. 

The FINRA rules are considerably extensive, trusting an advocate that knows the regulations backward and forward provides a much greater advantage than an individual trying to learn regulations for the first time as fast as possible before the case.  A security arbitration attorney can also identify elements of the specific violations a brokerage firm may have committed.  This allows a securities arbitration lawyer to provide adequate and successful defense.

A securities arbitration lawyer not only knows the procedures and complexities of presenting a case like this, but chances are they also are aware of the arbitrators on the list that is provided, the brokerage firm the client invested with and opposing attorneys.  They know the weaknesses and strengths of all the individuals involved and know the most effective approaches to those participants.

Navigating a complex process like the securities arbitration process, on your own can result in detrimental consequences that cannot be undone.  Securities arbitration attorneys specialize in this area and are experts at advocating for their clients.  Retaining an experienced and skilled securities arbitration attorney can only increase your chances of recovering your funds and obtaining a successful outcome.

Call us at (732) 449-0449 for more information from Anthony J. Cafaro, P.C. or to schedule a consultation in our office in Sea Girt.

NOTE: This is for informational purposes only and does not constitute legal advice.


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