Investment losses are not a topic that anyone relishes discussing. Losses may occur be due to a multitude of reasons, including losses due to unscrupulous financial advisors. Fortunately, in many cases, it is possible to recover some, or all, of the money that has been lost.
Getting to the Root of the Loss
Investment losses often occur because a broker made bad recommendations, was negligent in handling your account, or has implemented a fraudulent scheme to take your hard-earned money. Any misconduct on the part of the broker is a reason to contemplate pursuing legal action. However, not all of these cases of lost funds are due to the mishandling of the account. It is necessary to investigate in order to understand the underlying root cause of the loss. This is why it is important to contact an attorney who can study the facts your case and provide you with direction on how to proceed.
Seeking Legal Counsel
An attorney that specializes in investment loss recovery can help an investor determine if the loss was due to misconduct, fraud or negligence. Attorneys will review and analyze all documentation and evaluate the investor’s relationship with their broker and the brokerage firm. The attorney will study all activity in the account, including account statements, trade confirmations and other relevant documentation. The attorneys do this to learn what caused, or triggered, the loss. Only then can an investor know if they have a chance to move forward with legal action.
What Not to Do
Investors may become very angry when they learn of the investment losses, and for good reason. Unfortunately, this emotional response can sometimes lead to actions the can hurt the investor’s case. Angry telephone calls, letters, and emails are not typically helpful and the broker can use them against the investor should they proceed with legal action. The better choice is to contact an attorney who can study and build the case before any action is taken against the broker.
Arbitration and FINRA
In most cases, filing an arbitration claim with the Financial Industry Regulatory Authority, or FINRA, is required to recover the losses.. The Statement of Claim is prepared by the lawyer, served on the broker. The broker will then respond with their Answer and Affirmative Defenses. FINRA arbitrators are then selected. Attorneys for both parties meet with the arbitrators at a pre-hearing conference to make decisions about the final hearing and exchange any pertinent documentation. Prior to the final hearing, the broker may attempt to resolve the dispute. If the brokerage firm does not offer a settlement, or the investor does not wish to take an offer, the final hearing takes place and the arbitrators decide if an award for damages will be entered and the amount of that award.
Notes of Consideration
Generally speaking, the loss must have taken place within the last six years. Any loss that occurred before that time may be barred from litigation. This is only one of the many reasons it is important to stay vigilant and closely watch your investments.
Some investors may believe that they cannot afford an attorney, though this is rarely the case. In most cases, our firm does not collect a fee unless a recovery has been received for the client.
Not all attorneys are created equally, and some are not experienced in this filed. Attorneys may be very adept with the law in other practice areas, but may not specialize in securities litigation. Schwartz’s Investor Advocates focus on reclaiming funds lost by investors.
Final Words
Should you find yourself in a situation where you would like to attempt to recover lost funds, you have access to professionals who focus entirely on advocating for investors. Should you need a securities attorney, we are here for you. Call our office or complete our online form to learn how we can help you.
