Skip to Content

Unexpected Investment Losses? 3 Key Facts About Securities Arbitration

April 24, 2017 Blog

For individual investors, securities arbitration through the Financial Industry Regulatory Authority (FINRA) provides a streamlined opportunity to recover fraudulent investment losses. If you have experienced sudden and unexpected losses in your investment account, here are six key facts you need to know about FINRA arbitration:

1. To File, Your Broker or Advisor Must be Registered with FINRA.

In order to be eligible for FINRA arbitration, you must have suffered investment losses in an account managed by a broker or brokerage firm that is registered with FINRA. All legitimate brokers and brokerage firms should be registered, and you can use FINRA’s BrokerCheck® tool to find out if your investment manager is a FINRA member.

2. You Have Six Years to File for FINRA Arbitration.

Under FINRA’s arbitration rules, investors have six years to file for arbitration. This “statute of limitations” runs from the date of the fraudulent loss. While six years is a long time, (i) your losses may be spread out over an extended period of time, and (ii) filing promptly can increase your chances of securing a financial recovery.

3. Through FINRA Arbitration, Investors Can Recover Fraudulent Investment Losses.

Investing inherently involves a risk of loss. Not all losses are fraudulent, and not all losses are eligible for FINRA arbitration. If your losses are the result of market conditions, your broker may not have done anything wrong.

However, broker fraud takes many forms, and if your losses do not appear to be tied to market factors, you should discuss your rights with an attorney. Some of the most common forms of broker fraud include:

  • Breach of fiduciary duty
  • Excessive trading
  • Misrepresentations and omissions
  • Over-concentration in stocks or other investments
  • Unauthorized trading
  • Unsuitable investments

For more information about each of these forms of broker fraud, you can read: Common Causes of Action in FINRA Arbitration.

Contact Zamansky LLC for a Free and Confidential Consultation

The investment fraud lawyers at Zamansky LLC represent individuals in FINRA arbitration nationwide. We provide free case evaluations, and we do not charge any legal fees unless we help you secure a financial recovery. To find out if you are eligible to file for arbitration, call us at (212) 742-1414 or request your free case evaluation online today.