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How Long Do I Have to Make a Claim Against My Financial Advisor?

Many people turn to investment with the hope of generating an extra source of income or financial independence or “saving for a rainy day.” However, beating the market is not a guarantee, especially if your financial advisor has hindered you from doing so. So, if you suspect you’ve been a victim of investment fraud or broker misconduct, you may wonder how long you have to make a claim against your financial advisor. In this article, I will guide you through the time limits and eligibility factors that you need to be aware of when considering making a claim. 

What Is A Statute of Limitation? 

A statute of limitations is a law that regulates the deadline by which a legal claim must be filed. In some instances, the statute of limitations clock runs out on a case, causing the investor to lose the right to take legal action. You don’t want this to happen.

In a claim against your financial advisor, the statute of limitations is dependent upon the specific facts surrounding your case. Generally, statutes of limitations apply to most areas of civil and criminal law, including a few FINRA arbitrations. With that said, if you’ve been wronged by a financial advisor, it is imperative that you contact a qualified investor advocate at your earliest convenience as you have limited time to seek arbitration. Eligibility and time limits are extremely complex in investment fraud cases, as is determining the exact time FINRA arbitration eligibility and any relevant statutes of limitations must be addressed. You don’t have to do this alone; our team can help you preserve your rights. 

FINRA Arbitration Eligibility

FINRA arbitration eligibility is determined by FINRA Rule 12206. This rule states that investors have six years to initiate arbitration from the date on which the misconduct or fraud occurred. At a glance, six years seem like a long period, however, the additional statute of limitations, in addition to the FINRA rule, may still apply, making it much more complex. 

Statute of Limitations 

The statute of limitations for financial advisor negligence or fraud claim differs from FINRA’s procedural eligibility rules. Generally, these claims are brought under Section 10(b) of the Securities Exchange Act of 1934 or SEC Rule 10b-5. The applicable statute of limitations for these are: 

  • A maximum of two years after the detriment was or should have been brought to light.
  • A maximum of five years after the fraud or misconduct took place

Also, some cases may also be brought under further federal or state laws. With that said, it is quite difficult to determine exactly when your clock started running; particularly when multiple transactions took place. Ultimately, a case-by-case evaluation will be necessary. 

The Interaction Between Limits and Eligibility

 It can be difficult to understand the interaction between FINRA’s arbitrations eligibility rule and the state and the federal statute of limitations. This is especially true when the time frame to arbitrate is much longer than the statute of limitations. So what does this mean? The reality of law is very complicated, and therefore, there’s no simple answer to this question. Although you technically have six years to seek a FINRA arbitration, your rights may be limited (in time) depending on state or federal law applicable to your location and your case. 

Time Frames Are Complicated. Take Action. 

The bottom line of the time limits and eligibility that apply to financial advisor claims is that they are notoriously complex as many different factors play a part. Depending on the unique circumstances of your case, you might have to deal with:

  • FINRA rules 
  • Federal Law
  • The Judgement of an individual arbitration panel 
  • Several different state laws 

To determine exactly when the clock started ticking on your case, an attorney will need to review your case in detail to help assess how the different regulations would apply to you. We recommend taking immediate action, as it can protect your legal rights and financial interests in the long run.

Contact Schwartz Law Firm To Claim Against Your Financial Advisor

Our team is here to help review your case and provide expertise on how to proceed. Along with my team here at Schwartz Investor Advocates, I have dedicated my career to helping individuals who have experienced significant losses and been taken advantage of by their financial advisors. Since the laws and regulations that apply to financial advisors are complex, I always recommend consulting with an expert if you are unsure as to whether you are a victim of misconduct or fraud. If you would like to talk to me about losses you have incurred, or any other concerns you may have, please contact me at 1-855-463-9859 or [email protected]  for a free consultation. You can also request a free case evaluation by sending us a message through our secure contact form.

Matthew Schwartz

Matthew Schwartz is a Shareholder at Schwartz, P.A. where he serves as the practice group leader for their securities litigation and professional negligence practice group. His practice is focused on plaintiff-side securities arbitration and litigation, representing individual investors and institutions in claims against brokerage firms, investment advisors, commodities firms, hedge funds and others. He also represents plaintiffs who have been damaged by their insurance agents, lawyers, accountants and other professionals. He is an accomplished commercial litigator who has handled a variety of business disputes and other consumer claims.

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