Recovering Your Losses:

Loss/Recovery Process

Arbitration

The Office of Dispute Resolution of FINRA provides securities arbitration proceedings designed to resolve disputes between victimized investors and their financial advisors. Other forms of victimization for which investors can seek relief include violation of the Prudent Investor Rule, in addition to various statutory remedies such as New York State’s Prudent Investor Act under §11-2.3 of the Estates, Powers & Trusts Law of New York State (EPTL).

FINRA Securities Arbitration | Legal Help

Additionally, financial professionals also have access to FINRA securities arbitration for dispute resolution in matters involving wrongful termination.


Litigation

Investment fraud and stockbroker fraud takes many different shapes and forms, and most investors don’t know their rights under the Securities Law. Wrongful trading activity in the accounts of the everyday American investor can include account churning, private placement fraud, breach of fiduciary duty, annuities fraud, stock manipulation, unauthorized trading, and embezzlement. Securities fraud can also include a Ponzi scheme, involving variable annuities, as well as wrongful activity related to retirement and IRA accounts.

Retirement Accounts

When serving as an IRA custodian for financial accounts, corporate trustees and custodians under IRS section 408(b) also owe additional contractual obligations, as well as being required to follow the Know Your Customer Rule of the Financial Industry Regulatory Authority (FINRA).

Other types of retirement accounts include those subject to ERISA, the Federal retirement protection act, under which responsible individuals and financial institutions owe a fiduciary duty to their customers to protect customer accounts from excessive risk, lack of diversification, and unnecessary losses.

Claims for Victimization

In 1987, the United States Supreme Court in the case of McMann v. Shearson held that the customers of securities brokerage forms are required to submit their claims to arbitration in circumstances where they have previously signed a contractual agreement to arbitrate disputes, as opposed to pursuing them in the court system. In certain instances, investors can pursue their claims for victimization in the courts. In particular, where an investor has not previously contractually committed to submit such disputes to arbitration, the courts may be an available forum to address these disputes.

Further, the claims of shareholders or members of closely-held companies usually have direct access to the court system when faced with direct claims against such companies and their officers, directors, and oppressing majority shareholders. Mr. O’Connor has been pursuing the rights of victimized investors in the court system since 1985.


Mediation

The mediation of securities brokerage disputes is a newly emerging approach that has gained considerable interest over the past several years. Mediation involves the selection of a single, mutually-acceptable mediator who would devote time and experienced mediation skills towards an effort to resolving a customer dispute through intensive discussion and negotiation sessions with the clients and attorneys on both sides of the dispute.

Office of Dispute Resolution of the Financial Industry Regulatory Authority (FINRA).

Mediation services are available under the auspices of the Office of Dispute Resolution of the Financial Industry Regulatory Authority (FINRA), as well as through a number of private mediation services. Typically, mediators are experienced business people and include individuals who have worked as brokerage firm managers, attorneys, judges and/or accountants. They are paid by the parties pursuant to a negotiated fee arrangement.

Although the results of a mediation session are not binding, in over 85% of the cases that are mediated, investors agree to the settlement ultimately arrived at by the mediator and agree to settle their claims with brokerage firms.

Advantages of Mediation

Advantages of mediation include reduced arbitration hearing session fees, reduced expert witness fees and significantly less time spent in the discovery and hearing process associated with arbitration.

A party who is unhappy with the results of mediation and who does not agree to settle in accordance with a mediator's recommendation or an adversary’s offer of settlement, will have the right to pursue his or her claim through arbitration or litigation, if applicable, if their rights to pursue the same have been properly reserved.

Further Reading

Firm Overview


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