Brazilian Investors Can Recover Investment Losses in Arbitration


Investors in the United States have a convenient and efficient procedure to recover investment losses against their financial advisors through arbitration at the Financial Industry Regulation Authority (FINRA). Investment arbitration at FINRA has returned hundreds of millions of dollars per year to aggrieved investors. The most frequent claims brought by investors against their financial advisors involve “unsuitable” recommendations (risky investments recommended to conservative investors); fraud and misrepresentation (broker lying about the risk of an investment); misrepresentation regarding complex and opaque financial products such as structured notes and derivative investments sold to retail investors.

Investors in Brazil and other Latin American countries should be aware that they have the same rights as U.S. citizens in bringing claims against securities broker-dealers located in the United States. A convenient forum for arbitration by Brazilian investors could be Miami or New York where FINRA regularly holds arbitration hearings.

Just recently, the law firm of Zamansky LLC represented a wealthy Brazilian investor and successfully recovered a substantial portion of his losses resulting from recommendations of unsuitable exchange traded funds (ETFs) against a major United States securities firm.

Zamansky LLC has also over the years represented many investors in Argentina and Chile and recovered losses incurred in stocks and structured notes and other complex products. In such cases, the rules of the United States Stock Exchanges and FINRA would apply to the misconduct of financial advisors dealing with investors in Latin America. Arbitration Panels are entitled to award Brazilian investors the full amount of their stock losses, interest, and in appropriate circumstances, punitive damages and attorneys’ fees, where the financial advisor’s conduct was malicious or egregious, such as taking advantage of an elderly or unsophisticated investor.

Brazilian investors should be aware that there is a 6 year “eligibility rule” requiring any claims for stock losses to be brought within 6 years of the date of purchase. Since many Brazilian and other investors lost a large percentage of their account value in 2008 during the global financial crisis, investors need to act promptly to retain U.S. counsel to initiate FINRA proceedings before the expiration of the 6 year eligibility period.

Once an arbitration is commenced, it usually takes 12 – 18 months from the time a case is originated until the arbitration hearing occurs. The discovery is much more streamlined than in court cases and usually involves exchange of documents and no depositions will be taken. Investors will be required to attend the arbitration hearings to present their case. Often times cases are settled prior to arbitration, either through direct settlement between attorneys or through the mediation process.

Zamansky LLC offers its services on a “contingent fee” or success fee basis in which the investor only pays a legal fee if there is a financial recovery in the case.

For more information on bringing arbitration cases to recover investment losses contact Jake via email at jake@zamansky.com or call the firm at 212-742-1414 to attain more detail about arbitration cases.