Stock Fraud Lawyer
Alternative investments are attractive because they offer the potential for significant returns. However, this potential reward comes at a cost: These investments are labeled as 鈥渁lternative鈥 for a reason, and it is because they carry risks that are not suitable for most individual investors. Contact a stock fraud lawyer at AV短视频 迟辞诲补测.听
Alternative Investments Generate High Commissions and Fees, and This Makes Them Attractive to Brokers
These investments are also attractive to brokers, but for an entirely different reason: Since alternative investments are harder to sell, brokers earn higher commissions and fees when they sell them. So, even if an alternative investment is not a good option for an individual investor, the broker may still push the investment because it is in the broker鈥檚 best interests to do so.
With this in mind, if you have lost money in an alternative investment, you should speak with a stock fraud lawyer about your options. If your broker misled you into a high-risk investment, you may be entitled to recover your losses through arbitration with the Financial Industry Regulatory Authority (FINRA). An alternative investment lawyer at AV短视频 can provide an in-depth assessment of your legal rights, and if you are entitled to recover your losses, our stock fraud lawyer can pursue a claim against your broker in FINRA arbitration on your behalf.
Do You Have a Claim Against Your Broker for Alternative Investment Fraud?
Under federal securities laws and FINRA regulations, brokers owe several duties to their customers. Among them, brokers must perform adequate due diligence before recommending investments, and they must make investment recommendations that are suitable to their customers鈥 individual risk profiles and investment objectives.
Brokers also have a duty to disclose all material facts. This includes disclosing the risks that an investment entails. It also includes disclosing any conflicts of interest (i.e., substantially higher commissions and fees than brokers can earn by selling more traditional securities). If a broker violates any of these duties, then the broker can鈥攁nd should鈥攂e held accountable when an alternative investment leads to unrecoverable losses.
As a result, relying on brokers to recommend alternative investments presents two distinct sets of risks for investors (along with the inherent risk of purchasing a speculative investment). Both of these risks can potentially give rise to broker negligence or misconduct claims in FINRA arbitration:
- Broker Negligence 鈥 In some cases, brokers will negligently recommend alternative investments to retail investors. If a broker does not understand how an alternative investment works or the risks it entails, the broker cannot provide an informed investment recommendation.
- Broker Misconduct 鈥 In other cases, brokers will intentionally withhold information about investment risks or misrepresent the risks associated with an alternative investment product. Typically, brokers do this because they want their customers to make investments that trigger substantial fees and commissions.
Both of these are considered forms of broker fraud, which our investment fraud lawyers will handle under federal securities laws and FINRA鈥檚 rules. Whether your broker was negligent or intentionally misled you, you have the same rights in FINRA arbitration. You can hire an alternative investment lawyer to assert your rights at no out-of-pocket cost, and you can work with your lawyer to prove that you would not have made the investment had you had the opportunity to make an informed decision. This applies to all types of alternative investments, including:
- Annuities
- Business Development Companies
- Conservation Easements
- Delaware Statutory Trusts (DSTs)
- Energy Sector Investments
- Exchange-Traded Funds (ETFs)
- Junk and High-Yield Bonds
- Life Insurance
- Market-Limited Notes
- Market-Linked Certificates of Deposit (CDs)
- Options
- Private Placements
- Penny Stocks
- Real Estate Investment Trusts (REITs)
- Structured Products
- Unit Investment Trusts (UITs)
- Variable Annuities
What To Do If You鈥檙e a Victim of Stock Fraud
If you are (or believe that you may be) a victim of stock fraud, there are some important steps you need to take in order to protect your legal rights. For example, you should take the following steps as soon as possible.
1. Collect Your Investment Records
If you have concerns about fraud, you will want to collect your investment records to review with a stock fraud lawyer. This includes records such as:
- Your brokerage account agreement
- Your brokerage account statements
- Any documented communications you鈥檝e had with your broker (i.e., emails or text messages)
You should also take notes detailing why you believe you may be a victim of stock fraud. Did you receive misleading information about an investment opportunity? Did you invest in a stock you didn鈥檛 understand? Did your broker charge excessive fees that weren鈥檛 previously disclosed? While these are all forms of fraud, they are all different forms that require a different approach to recovering your losses.
2. Discuss Your Situation with a Stock Fraud Lawyer
As soon as possible, you should discuss your situation with a stock fraud lawyer. If you have a claim against your broker for stock fraud, you will want to file for FINRA arbitration promptly. Filing for FINRA arbitration affords the opportunity to recover your fraudulent investment losses without going to court, and all brokers are required to submit to arbitration under FINRA鈥檚 Rules.
Even though recovering stock fraud losses through FINRA arbitration does not involve going to court, it is still important to have an experienced stock fraud lawyer on your side. The FINRA arbitration process has its own rules, requirements and complexities鈥攁nd brokerage firms pay big legal fees to fight investors鈥 claims. By hiring an experienced lawyer to represent you, you can ensure that the process is fair, that all relevant facts get presented, and that the arbitrator makes a reasoned decision based on an accurate understanding of your case.
3. Work with Your Lawyer to Recover Your Fraudulent Stock Losses
When you hire a stock fraud lawyer to pursue a claim in FINRA arbitration, it is important to work with your lawyer throughout the process. While your lawyer will deal with FINRA and negotiate with your brokerage firm鈥檚 lawyers on your behalf, your lawyer will rely on you to provide certain information and participate in certain decisions. By playing an active role in your FINRA arbitration claim, you can help maximize your chances of success, and you can ensure that your lawyer has all of the information he or she needs to represent your interests effectively.
If your lawyer has the evidence he or she needs to prove that you are a victim of stock fraud, your lawyer will be able to help you recover various forms of compensation. These include compensation for your loss of principal, your loss of potential investment profits and perhaps even other impacts that your fraudulent losses have had on your life. To calculate your losses, your lawyer will rely on the information you supply as well, so the more information you provide, the better able your lawyer will be to seek maximum compensation on your behalf.聽
In most cases, the options for seeking to recover your losses as a victim of stock fraud are:
- Arbitration 鈥 The Financial Industry Regulatory Authority (FINRA) provides an arbitration forum for investors to pursue claims against their brokers without going to court. Pursuing FINRA arbitration is defrauded investors鈥 primary option in most cases. FINRA arbitration awards are binding, and brokers must pay in order to avoid disciplinary action and loss of registration.
- Stock Fraud Lawsuit 鈥 The second option is to file a stock fraud lawsuit. There are circumstances in which it will make sense to sue a broker instead of going to court, and filing a lawsuit will often be necessary when dealing with other forms of stock fraud (i.e., a company鈥檚 release of misleading information or market manipulation).
- Mediation 鈥 In some cases, it will be possible to resolve stock fraud claims through mediation. If both sides agree that pursuing mediation is the best path forward, mediation can be an efficient option鈥攁nd pursuing mediation does not foreclose the opportunity to go to arbitration or file a lawsuit if necessary.
When you contact AV短视频 to discuss your stock fraud claim, a stock fraud lawyer will go over your options in detail and help you choose the best path forward. Your lawyer will work to recover your fraudulent losses on your behalf, and your lawyer will keep you updated and informed every step of the way.
A Stock Fraud Lawyer Explains How To Prepare for FINRA Arbitration
Since most stock fraud cases go to FINRA arbitration, as a victim of fraud, it is a good idea to familiarize yourself with this process. Specifically, you should understand what it takes to prepare to file your claim with FINRA.
When you have a stock fraud claim, it is up to you to prove your legal rights. This means that you need to be able to prove both (i) that you are a victim of stock fraud and (ii) how much you are entitled to recover. While your stock fraud lawyer will handle much of this for you, your lawyer will rely on you to provide the information he or she needs to successfully pursue a claim on your behalf.
With this in mind, you should take the time to gather your account statements. You should go back to before the suspected fraud, if possible. You should also make copies of all relevant communications and take notes detailing why you suspect that you are a victim of fraud. All of these will help your stock fraud lawyer evaluate your claim, and if you have a claim, they will help your lawyer take action as efficiently as possible.聽
What Investors Really Need to Know about Alternative Investments
If you have lost money in an alternative investment, the simple truth is that your broker probably didn鈥檛 tell you everything you needed to know. At best, your broker was being careless. At worst, your broker was willing to profit at your expense. Here is what investors really need to know about alternative investments:
1. Alternative Investments are Not Suitable for Most Retail Investors
Due to the substantial risks involved, alternative investments are not suitable for most retail investors. As a result, most upstanding brokers will not even present these investments as options to their customers. Generally, when well-heeled investors put money into alternative investments, they invest an extremely small percentage of their funds as part of a broader diversification strategy.
2. Alternative Investments are Exempt from Registration with the SEC
Under, many types of alternative investments are exempt from registration with the U.S. Securities and Exchange Commission (SEC). This means that issuers are not required to adhere to the requirements for selling on public exchanges, and they do not have to provide financial transparency to their investors. But, this does not give brokers an excuse to make uninformed recommendations.
3. Returns on Alternative Investments are Notoriously Difficult to Predict
While brokers often pitch alternative investments as offering the potential for significant returns, the reality is that returns on alternative investments are notoriously difficult to predict. Let鈥檚 look at the example of a real estate investment trust (REIT).
When you invest in an REIT, your gain or loss is contingent upon the investment strategies and management capabilities of a few individuals who have little, if any, accountability. Additionally, if you invest in a non-traded REIT, selling your investment and salvaging whatever principal you have left could be almost impossible. Contrast this with investing in a portfolio of blue chip companies, where the companies’ executives are accountable to their shareholders, where the companies are required to maintain financial transparency, and where you can sell your shares on the open market at a moment鈥檚 notice.
Speak with a Stock Fraud Lawyer About Your Alternative Investment聽
If you have lost money in an alternative investment and would like to know more about filing to recover your losses through FINRA arbitration, we encourage you to contact us promptly for a free, no-obligation consultation. To discuss your broker fraud claim with an stock fraud lawyer in Miami at AV短视频 in confidence, call 212-742-1414 or request an appointment online 迟辞诲补测.听