UNDERSTANDING SECURITIES LITIGATION
Securities Litigation is a broad term that applies to everything from outright embezzlement and brazen stock manipulation to misstatements in financial disclosures by a public company. At The Green Firm, we tend to focus on disputes that arise in the context of the broker/client relationship. Most commonly, we pursue cases where a broker or investment advisor has perpetrated a deceptive act that results in a loss of capital for an investor or investors, willfully or through negligence, and in violation of existing securities laws. Even something as seemingly innocuous as a financial advisor offering high-risk investment opportunities to an unsophisticated investor who either cannot understand or cannot afford these investments can be considered unlawful and trigger litigation. Sadly, this is happening all the time, to all kinds of people.
FINRA Dispute Resolution Process
Typically, a sudden or consistent loss of capital by an investor--often in conjunction with a failure of communication between broker and investor--will motivate the type of disputes we see most. It's our job to investigate the root causes of this loss of capital and the underlying deception or negligence. Once we have determined wrongdoing on behalf of the financial adviser, we will pursue securities litigation. Since most brokerage agreements stipulate that disputes will be resolved through FINRA arbitration, we rarely have an opportunity to bring cases before a jury. Moreover, in FINRA resolution proceedings, there are very strict rules of procedure and discovery, which makes it imperative that investors find attorneys who like The Green Firm have experience and a history of past successes with this rather specialized form of arbitration.
Brokerage Firm Supervisory Obligations
Another aspect of securities litigation involves holding brokerage firms accountable for the negligent actions of their brokers. In many cases of investment adviser misconduct, we find the supervising manager and the brokerage firms themselves guilty of contributing to investor loss of capital. The "bad apple" theory only goes so far. Rather, it's been our experience that the bad behavior of an individual broker often indicates a structural problem within the brokerage firm itself, whether it be lack of adequate oversight of affiliated brokers or lack of understanding of the complex financial products their firm is pushing on clients inappropriately. As brokerage firms continue to grow in size, and financial products continue to get more complex, we expect to see more and more disputes that implicate the brokerage firm as a whole. In fact, we have successfully brought cases against some of the nation's largest brokerage houses by starting with a single broker's misconduct.
PA & NJ SECURITIES LAWYERS
If you or anyone you know has been the victim of investment fraud or broker misconduct, please contact our experienced securities litigation team immediately toll-free at 1-855-462-3330 or by using our online contact form.