Financial Fraud & FINRA Violations


Concerned About Fraudulent Investment Losses? Speak With a Financial Fraud and FINRA Attorney for Free

Financial fraud is a very real issue for individual investors. From incompetence to intentional efforts to profit at investors’ expense, there are numerous types of financial fraud that can lead to substantial investment losses.

In many cases, these losses would be permanent if it were not for the process known as FINRA arbitration. The Financial Industry Regulatory Authority (FINRA) is the investment industry’s primary watchdog and regulator for investment brokers, and registered brokers are subject to mandatory arbitration of investor claims. If you believe that losses in your investment portfolio are the result of financial fraud, you should speak with an attorney about filing a FINRA arbitration as soon as possible.

National Investment Arbitration Lawyers Representing Individual Investors

Zamansky, LLC is an investment and securities fraud law firm serving clients nationwide. Our attorneys represent individual investors in FINRA arbitration and other cases against their brokers and investment advisors, and they collectively have over 60 years of combined experience helping investors recover their fraudulent investment losses. Whether you opened a brokerage account on your own or you have been saving for retirement in a 401(k), our lawyers can help you, and we encourage you to contact us promptly for a free initial consultation.

Our firm is led by Jacob H. Zamansky, a financial fraud lawyer who is one of the country’s leading authorities in the area of securities arbitration. With more than three decades of legal experience, he is trusted by investors and other attorneys across the nation. He has been at the forefront of the efforts to “clean up” Wall Street, and he has successfully represented clients against the largest brokerage and financial firms in the world.

Our Services for Investors With Fraudulent Losses

We represent clients ranging from retirement savers to multi-millionaire private investors. From our experience, we know that no one is immune to the risks of investment fraud, and we know that scam artists and unscrupulous brokers do not discriminate when it comes to targeting unsuspecting investors. We routinely help investors recover fraudulent losses resulting from:

  • Unsuitable Recommendations – Investment professionals have a legal obligation to provide their clients with “suitable” investment advice. A suitable investment recommendation is one that (i) has a reasonable basis, (ii) fits the individual investor’s financial condition and risk profile and (iii) makes sense within the broader scope of the investor’s overall portfolio. Unsuitable investment recommendations can cause unexpected losses when investors can least afford them, and they will often provide grounds to seek financial recovery through FINRA arbitration.
  • Breach of Fiduciary Duty – Investment professionals who owe a fiduciary duty to their clients must make all investment recommendations with their clients’ best interests in mind. Recommending investments solely because they will generate fees or commissions is just one example of a breach of fiduciary duty that can trigger liability in FINRA arbitration. While certain investment professionals are not subject to a fiduciary duty, many are; and, if you have a claim for breach, we can help you secure a financial recovery.
  • Misrepresentation – Common misrepresentations include mischaracterizing the risk associated with a particular investment, misrepresenting a company’s financial condition and withholding information about the fees and commissions investors will be required to pay. Both intentional and unintentional misrepresentations can support claims in FINRA arbitration, and there are a number of ways we can prove that your broker or investment advisor deprived you of the opportunity to make an informed decision.
  • Excessive Trading – Excessive trading is another common form of investment fraud that will often be accompanied by unsuitable investment advice, breach of fiduciary responsibility and fraudulent misrepresentations or omissions. Also known as “account churning,” excessive trading involves buying and selling securities in an investor’s account for the purpose of generating fees and commissions. If you are seeing trades that you did not authorize, if your broker or advisor is frequently “in and out” of individual investments or if you are being charged excessive (and perhaps ambiguous) fees, these are all potential signs that you are a victim of investment fraud – and a stock fraud lawyer can help.
  • Other Forms of Fraud – Various other forms of investment and financial fraud can support claims in FINRA arbitration as well. At Zamansky, LLC we represent clients whose portfolios were overconcentrated, who were bilked into oil and gas investment scams, who invested in junk bonds and overly-complicated structured products, and who have suffered all other types of fraudulent investment losses. If you believe that you may have a claim, or if you are unsure and would like to find out, it is strongly in your best interests to seek legal representation as soon as possible. Our FINRA arbitration attorneys can assess your situation and help you make an informed decision about asserting your legal rights.

About FINRA Arbitration

FINRA arbitration is a legal process that results in a legally-binding decision without the need to go to court. FINRA arbitrators are experts in investment fraud, and each year they handle hundreds of cases that result in hundreds of millions of dollars in fines and restitution.

5 Key Facts about FINRA Arbitration for Individual Investors

1. If Your Broker is Registered With FINRA, You Are Entitled to File for Arbitration

Under FINRA’s rules for registered brokers, if your broker or brokerage firm is registered (which it generally should be), you are entitled to file for arbitration. You can use FINRA’s BrokerCheck tool to find out if your broker or brokerage firm is registered.

2. You Have Six Years to File Your Arbitration Claim

The “statute of limitations” for seeking to recover fraudulent investment losses through FINRA arbitration is six years. While you don’t want to wait anywhere near this long if you don’t have to, if it has been years since your broker took advantage of you, you could still be entitled to recover your fraudulent losses.

3. If You Win, You Are Entitled to Payment Within 30 Days

If the FINRA arbitrators rule in your favor, you will be entitled to payment within 30 days of the date of the arbitration award. In addition, most FINRA arbitration claims settle, which means that the broker or brokerage firm agrees to compensate the investor for his or her losses.

4. Hiring an Attorney Isn’t Required, But It Is Strongly Recommended

Although you are not required to hire a FINRA attorney to represent you in arbitration, seeking legal representation is strongly recommended. Not only is the arbitration process intricate and complicated, but you need to be able to prove that you are legally entitled to recover your investment losses.

5. It Can Cost You Nothing Out of Pocket to Hire Experienced Legal Representation

At Zamansky, LLC, we typically handle individual investors’ arbitration claims on a contingency-fee basis. This means that our financial interests are fully aligned with yours, and you do not pay anything unless we help you secure financial compensation.

Frequently-Asked Questions (FAQs): Recovering Fraudulent Investment Losses Through FINRA Arbitration

Q: How do I know if I should file for FINRA arbitration?

As an individual investor, it can be difficult to know whether you have legal grounds to pursue a financial recovery. The best way to determine whether you should file for FINRA arbitration is to discuss your case with an experienced securities arbitration attorney. At Zamansky, LLC, we offer free initial consultations, and our attorneys can help you decide whether to pursue a claim.

Q: What are my chances of recovering fraudulent investment losses through FINRA arbitration?

Your chances of receiving an award in arbitration are entirely depending upon the facts of your particular case. As a result, we cannot estimate your chances of recovery without speaking with you. However, we can share some statistics that have been published by FINRA:

  • From 2012 through 2016, 76 percent of all cases filed resulted in settlements or arbitration awards
  • Approximately 80 percent of all FINRA arbitration rewards result in payment to the investor, and FINRA and Congress are both actively considering measures to bolster investors’ ability to recover
  • From 2013 through 2017, FINRA arbitrators awarded investors more than $233 million in restitution for fraudulent investment losses

Q: Are all misrepresentations and omissions grounds for investors to seek financial restitution?

To constitute a violation of Rule 10b-5, a misrepresentation or omission needs to be “material.” This means that it must be something that would impact a reasonable person’s investment decisions. If you relied on inaccurate or incomplete information from your broker or investment advisor when making an investment decision, you might have a claim for actionable financial fraud.

Q: Can an investment broker disclaim his or her obligation to provide suitable investment advice?

Investment brokers’ obligation to provide suitable investment advice exists under FINRA Rule 2111. While brokers will often try to limit their potential liability in their customer contracts as much as possible, the Supplemental Material under Rule 2111 is clear: “A member or associated person [i.e., a broker or brokerage firm] cannot disclaim any responsibilities under the suitability rule.”

Q: What should I do if I suspect investment fraud?

If you suspect that you may be a victim of investment fraud, you should speak with an attorney promptly. In many cases, acting quickly will give you the best chance to secure a financial recovery. You should collect your account statements and any documents or communications you have received from your broker or advisor, as well as call to schedule a confidential initial consultation with an investment fraud attorney.

Additional Resources for Individual Investors Concerned About Fraud

Whether you are a novice investor or you have decades of experience under your belt, dealing with fraud is a unique circumstance that involves unique legal issues. While you don’t need to be an expert in investment fraud (that’s our job), you may find it helpful to learn a little bit more about your situation. For more information about investment fraud and the FINRA arbitration process, we encourage you to read:

Why Choose Zamansky, LLC?

If you think you may be entitled to recover your investment losses through FINRA arbitration, you need to make an informed decision about your legal representation. So, why should you choose Zamansky, LLC?

  • Experience – Our bond fraud lawyers have decades of experience representing individual investors and have recovered millions of dollars in compensation for their fraudulent investment losses.
  • Focus – Our law firm is committed to representing investors who are victims of fraud. Helping investors is all we do, and this focus has allowed us to become leaders in our industry.
  • Results – We have a proven record of success in FINRA arbitration. Our attorneys have won numerous high-profile cases, including a record $3.1 million award against UBS Puerto Rico relating to the Puerto Rican municipal bond crisis.
  • Team Approach – Our team of attorneys, led by firm founder Jacob H. Zamansky, takes a collaborative approach to fighting for our clients. We know what is at stake, and we do what it takes to win.
  • National Practice – With offices in the heart of Wall Street, we represent individual investors nationwide. Regardless of where you live, what you invested in, or how much you lost, we want to see you achieve justice, and we are prepared to fight for the compensation you deserve.

If you are ready to speak with an attorney, we encourage you to get in touch. You do not need to know if you have a claim in order to schedule a free consultation. We will explain everything you need to know; and, if you choose to move forward, we will do everything in our power to help you recover your fraudulent investment losses.

Schedule a Free Consultation With an Experienced Financial Fraud Lawyer

To schedule a free consultation with a lawyer experienced in financial fraud matters at Zamansky, LLC, please call (212) 742-1414 or contact us online. You can reach us 24/7, and if we are not available immediately, we will respond as soon as possible.