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Securities Fraud Allegations Present Substantial Risks for Brokers and Brokerage Firms

As an investor, pursuing arbitration with the Financial Industry Regulatory Authority (FINRA) affords the opportunity to recover your fraudulent investment losses. But, for brokers and brokerage firms, the risk of liability isn’t the only risk they face when accused of defrauding their clients. Arbitration claims can trigger additional scrutiny from FINRA, and this can spur good-faith settlement negotiations in many cases.

When pursuing FINRA arbitration as an investor, this is an important fact to keep in mind. As an investor, you can—and should—work with your lawyer to establish leverage by all means available. Reminding your broker or brokerage firm of the risks it faces, or working alongside FINRA during its investigation into your broker or brokerage firm, can substantially increase your chances of securing a favorable resolution. At Zamansky LLC, we exclusively represent investors in FINRA arbitration—never brokers or brokerage firms—and we have decades of experience using the arbitration process to secure favorable verdicts and awards for our clients.

Understanding the Risks Brokers and Brokerage Firms Face in FINRA Arbitration

Brokers and brokerage firms face three main risks as a result of their necessary relationship with FINRA. While brokers and brokerage firms are required to register with FINRA, doing so exposes them to investor arbitration claims, and it exposes them to the consequences of FINRA enforcement as well. Of course, brokers and brokerage firms can avoid these risks by maintaining compliance and acting in their clients’ best interests—but, as we all know, many fail to do so.

In addition to representing investors in FINRA arbitration, we also work alongside FINRA on behalf of our clients to assist with FINRA’s enforcement activities when warranted. When facing investor claims and parallel FINRA enforcement proceedings, the risks brokers and brokerage firms face include:

  • Civil Liability in FINRA Arbitration – Brokers and brokerage firms can face substantial civil liability in FINRA arbitration. At Zamansky LLC, we have recovered millions of dollars for defrauded investors through the FINRA arbitration process, including several multi-million-dollar awards.
  • FINRA-Imposed Fines – Along with civil liability, brokers and brokerage firms can also face liability for FINRA-imposed fines. These fines can also climb into the millions of dollars in many cases.
  • Other FINRA Sanctions – FINRA also has the authority to impose various administrative sanctions against brokers and brokerage firms that engage in investor fraud. These include additional oversight and reporting, temporary suspensions, and even permanent bars from the brokerage industry.

If you believe you may have an investment fraud claim against your broker or brokerage firm, it will be important for you to work with a lawyer who can use the full weight of FINRA’s Rules and the nation’s securities laws to your advantage. To learn more about how we help investors who have fallen victim to fraud, schedule a free consultation today.

Schedule a Free Consultation at Zamansky LLC

If you need to know more about filing an investment fraud claim against your broker or brokerage firm, we encourage you to contact us promptly. Call 212-742-1414 or contact us online to arrange a time to speak with one of our attorneys. 

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“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
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