Table of Contents
- What Is Securities Litigation?
- What Is the SEC?
- What Is the Financial Industry Regulatory Authority (FINRA)?
- What Are Common Securities Disputes?
- Can I Sue My Stock Broker?
- What Damages Are Available in a Securities Lawsuit?
- How Can I Find Out if I Have a Valid Claim After an Investment Loss?
- Securities Litigation FAQs
Investing is a smart way to earn income in the long run. But the industry is rife with the potential for fraud and other misdeeds. Every year, some financial professionals or businesses take advantage of retail investor’s trust and lack of expertise. In response, the U.S. Securities and Exchange Commission (SEC) acts to enforce the law, and private individuals like you must fight for compensation.
In the 2019 fiscal year, the SEC’s Division of Enforcement brought 862 actions, imposing $1.01 billion in penalties and ordering parties to give up $3.248 billion of illegally obtained profits. The same year, the SEC returned almost $1.2 billion to harmed investors.
If you’re an investor who’s lost money because of an unethical stockbroker, brokerage firm, or another financial professional, talk with a securities litigation attorney at Osborne & Francis. It’s time to find out if you have the right to bring a legal claim against that person or business, and if so, how much your case might be worth.
What Is Securities Litigation?
Securities litigation is a broad area of law encompassing disputes related to securities, such as debt, equity, derivatives, and hybrids, traded on the open market. If you are an investor, you may already be familiar with stocks, bonds, and mutual funds.
Securities are highly regulated to ensure fairness and stability. But fraud and mismanagement can cause investors significant losses, leading to government enforcement actions, civil lawsuits, and criminal charges. While losses are an inherent possibility with investing, losses due to a corporation or financial service provider’s wrongdoing may give you the right to sue your stockbroker or another party.
What Is the SEC?
The SEC is an independent federal regulatory agency trusted with protecting investors, maintaining orderly markets, and supporting capital formation. Congress formed the SEC in 1934 during the Great Depression.
Financial services firms and professionals have to register with the SEC to conduct business legally, and securities have to be registered with the SEC before being sold to investors. However, it’s important to note there are exceptions to SEC registration, and unregistered securities exist.
The SEC is an enforcement body and can bring actions against individuals and businesses. It also works with the U.S. Department of Justice (DOJ) when criminal charges may be appropriate.
If you were the victim of securities fraud or mismanagement, the SEC might get involved. The SEC is there to enforce compliance with financial regulations, not retrieve consumers’ losses. It’s best to hire a securities litigation attorney to protect your interests and recover compensation.
What Is the Financial Industry Regulatory Authority (FINRA)?
The SEC oversees FINRA, an independent non-governmental organization that governs licensing for securities professionals and creates and enforces rules for registered brokers and broker-dealer firms.
FINRA and the SEC serve two distinct purposes. FINRA oversees stockbrokers and brokerage firms in the U.S., while the SEC is responsible for maintaining fair markets for investors.
Depending on the reason for your losses, we may inform FINRA of wrongdoing by a licensed broker or firm. FINRA has the power to investigate claims and bar financial professionals or firms from the industry.
What Are Common Securities Disputes?
Securities disputes often arise after significant stock market losses. As an investor, you may believe your losses are due to fraud or mismanagement. An investment loss may create a legal action if your stockbroker or other financial service provider breached its fiduciary duty or violated a regulation or law.
Osborne & Francis has years of experience handling securities litigation. Common securities disputes may involve:
- Securities fraud
- Hedge fund fraud
- Breach of fiduciary duty
- Misrepresentation/Omission of facts
- Misleading investment illustrations
- Inappropriate margin trading
- Equity indexed annuities misconduct
- Variable annuities misconduct
- Inappropriate structured product
- Inappropriate variable life insurance products
- Inappropriate volatility-linked exchange-traded products
- Unsuitable investments
- Shareholder derivative cases
- Deal cases/Merger and acquisitions
- Securities class actions
- Opt-out cases in class actions
- Outside investment manager/Sub-advisers
Can I Sue My Stock Broker?
The ability to sue your stockbroker depends on whether they violated their fiduciary duty. A stockbroker can’t guarantee you’ll profit from your investments. But all financial services firms and professionals owe their investors a duty of care and loyalty, which means they must act in your best interest — not their own.
Your broker must:
- Learn about an investment before recommending it to you;
- Make sure every recommendation is appropriate for your portfolio and risk profile;
- Inform you of the risks of buying or selling a security;
- Disclose any conflict of interest they have;
- Not misrepresent any facts that you’d find important to making a financial decision; and
- Not buy or sell a security without your express permission.
If you suffered significant investment losses and believe your broker, firm, or business didn’t handle something properly, talk with our securities litigation attorneys right away. We’ll investigate the circumstances surrounding your loss and explain your legal options.
We’ll also investigate who’s to blame for your losses, such as a:
- Broker-dealer’s representative
- Brokerage firm
- Corporate officer
We may find a financial professional lied to you to induce you into specific investments. For instance, your broker might have recommended inappropriate investments that made them considerable profit. Or, corporate officers may have mismanaged a company, costing you and other shareholders tremendous value. We’ll be candid about what we find and whether it appears to give rise to a legal claim.
What Damages Are Available in a Securities Lawsuit?
At Osborne & Francis, we are highly experienced in securities disputes. We work tirelessly until we recover fair compensation for our clients.
You may receive compensation for the losses you suffered due to the fraud or inappropriately handled investments. Figuring out how much your claim is worth often involves hiring a financial expert, though it depends on the complexity of your case. The expert reviews your documents, tracks your investments, and calculates your losses based on a particular theory or formula.
How Can I Find Out if I Have a Valid Claim After an Investment Loss?
The best way to find out if you have a valid securities dispute is by consulting an experienced attorney. We find that most retail investors turn to their broker, financial advisor, or brokerage firm for answers about losses. The business will most likely politely but firmly brush you off by explaining you suffered market-related losses.
If you’re suspicious, don’t rely on the broker or firms’ explanation. Instead, seek out a second opinion or move directly to consulting us at Osborne & Francis. We offer a personal experience most bigger firms can’t provide. Despite remaining a boutique firm, we have the skills and resources to handle significant and complex cases.
Securities Litigation FAQs
Securities fraud, or investment fraud, is when a person or business misrepresents information to investors to profit at the expense of the investors. Examples include Ponzi schemes, pyramid schemes, insider trading, pump-and-dump schemes, and late-day trading. Call Osborne & Francis at (561) 293-2600 if you believe you’re the victim of securities fraud.
Securities disputes don’t move quickly. You should expect arbitration or litigation to last over a year — 18 months isn’t unusual. It’s best to talk with a securities litigation attorney at Osborne & Francis about the potential timeline.
Have a candid talk with a securities litigation attorney at Osborne & Francis about the claim process and the likely outcome. You should understand the best- and worst-case scenarios before you begin. You also need to understand the potential timeline and costs. Ultimately, it’s up to you to decide if it’s worth bringing a case, either monetarily or to protect other investors from harm.
Not necessarily. At Osborne & Francis, we often enter arbitration, which is an alternative dispute resolution method. We prepare for arbitration like a trial and present evidence showing the broker or firms’ wrongdoing and your losses. If we can obtain an award through arbitration, you don’t have to sue your stockbroker.