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Investor Fraud FAQ

If you’re an investor who’s been harmed, lost part of your retirement savings or lost your financial independence because of fraud or negligence, you need answers to questions.

Frequently Asked Stock Fraud Questions

Q: I’m a stock fraud victim. What do I do now?

A: If you lost money due to stock fraud or broker negligence, seek help immediately from a fee-based financial planner who can evaluate your investments and make sure you’re not in danger of losing more money. Also, make sure to document exactly what happened during your relationship with your stockbroker and brokerage firm and gather your monthly account statements. Finally, contact an experienced stock fraud attorney who will explain your legal rights and options.

Q: Why is it important to have an experienced stock fraud attorney on my side?

A: Trying to sue a brokerage firm is like David taking on Goliath. Wall Street brokerage firms have extremely skilled lawyers representing them. These lawyers know every trick in the book. Defrauded investors need an equally skilled lawyer representing them if they want to obtain the highest amount of compensation for their loss.

Q: I don’t have any of my financial statements. Is that a problem?

A: Even if you don’t have a single financial statement in your possession, a stock fraud attorney can obtain them directly from your brokerage firm. Your brokerage firm is legally obligated to keep a copy of your records and must give you a copy if you ask for one.

Q: Is it free to call the Consumer Investor Resource Center?

A: Calling the Consumer Investor Resource Center is a no-obligation phone call, and it’s absolutely free. We will listen to your story, answer any questions you may have and discuss your options.

Q: I still own the problematic investments at issue. Am I still eligible for compensation?

A: No matter if you have sold or continue to hold the investments at issue (and no matter if your losses are realized or unrealized), the Consumer Investor Resource Center can help you.

Q: If I contact the Consumer Investor Resource Center, will my stockbroker find out?

A: Your stockbroker will not find out if you contact the Consumer Investor Resource Center. We keep all your information confidential. If it will be necessary to contact your brokerage firm for any reason, it will be discussed with you ahead of time.

Q: I lost money in the stock market, but I don’t know what investments and stocks are in my portfolio and I don’t know how much I lost. Do I have to sift through all the paperwork myself?

A: Don’t worry. The attorneys who represent you will look at your records (and even obtain them directly from the brokerage firm if you can’t find them). Your attorneys will determine what securities are in your portfolio and perform detailed loss calculations to establish the exact amount of money you’ve lost.

Q: How much does all this cost?

A: Law firms recommended by the Consumer Investor Resource Center work on contingency fees, which means you won’t pay any money upfront and no money will be owed if they don’t recover any money for you.

 Q: How much do I have to lose in the stock market to have a case?

A: Many attorneys will take cases with losses under $100,000 with the right facts. Some of the facts relevant to your case are your (1) age, (2) educational background, (3) amount of investment experience, (4) net worth and (5) current income.

The important thing is that every case is different. The Consumer Investor Resource Center can help answer your questions and determine if a lawsuit may be appropriate in your individual situation. The call is free and the advice is free, so why wait?

Q: Do I need to find an attorney in my home city or state to file an FINRA arbitration claim for my stock market losses?

A: No. One of the most important considerations when finding a lawyer is the experience and track record of the attorney in FINRA arbitration proceedings. It is important to find the best attorney, regardless. Most stock market loss attorneys will take cases in all 50 states and will travel to you for important meetings and the arbitration itself.

 Q: Where is my arbitration hearing going to be held and do I have to go to the hearing?

A: If your case does not settle before trial, you will need to be present at the final arbitration hearing. FINRA has hearing locations conveniently located across the United States. Your attorney will select the hearing location that is closest to you, and he will travel there for the hearing. If you are ill or have an extreme circumstance that prevents you from attending your final hearing, your attorney will make every effort to reschedule the hearing, move the location to a more convenient one or argue for the best solution that fits your circumstance.

Q: My broker has closed up shop. Do I still have a case?

A: You may still have a case. If your stockbroker quit his job, the brokerage firm that employed him could be held liable for his actions. If your brokerage firm was bought out or taken over by another brokerage firm, the new firm may still be responsible for the fraud. An experienced stock fraud attorney has strategies for tracking down the responsible party and holding them accountable.

Remember, no two cases are exactly alike.The Consumer Investor Resource Center can answer your questions and help you find out if a lawsuit is possible in your situation. It’s a free, no-obligation call. We’re passionate about fighting stock fraud and we’re here to help.   

Q: I’m worried that this process will take years. How long does an FINRA arbitration claim take?

A: The best thing about FINRA arbitration is that it is very fast compared to normal court proceedings. FINRA has streamlined the process of resolving disputes. Senior citizens of a certain age can even request ‘expedited proceedings’ to fast-track the resolution of their claims.

On average, attorneys expect to complete an arbitration claim within eight months to 16 months after the initial filing date. However, each case is different. Some may be resolved sooner and some may take longer.

Q: Will I have to sue my stockbroker personally?

A: In most cases, you will not be required to sue your stockbroker. Brokerage firms are responsible for and can be held liable for the actions of their employees. In rare cases, a stockbroker will need to be named as a defendant, but in such extreme cases, fraud victims typically want to name their broker and hold him accountable for his actions.

Q: The stock fraud in my account happened a long time ago. Am I still entitled to compensation?

A: You only have a limited period of time in which to file a stock fraud arbitration claim, so it’s vital that you get in touch with an experienced stock fraud attorney as soon as possible after you suspect that you have been a victim.

Q: Do you recommend any websites for learning more about stock fraud?

A: Two excellent resources for learning more about stock fraud and your legal rights are the SEC (U.S. Securities and Exchange Commission) and FINRA (Financial Industry Regulatory Authority).

Q: I’m moving to a new stockbroker. Is there a way I can investigate his background to see if he’s ever been sued?

A:  The FINRA BrokerCheck service is an invaluable resource that allows consumers to investigate the background of their stockbroker and brokerage firm. If your broker has recently been found guilty of fraud, you’ll find out here. You can also contact your state’s department of securities regulation and ask them about your broker’s background.

Q: What are some informative books I can read about stock fraud?

A: A quick and easy read for learning about different kinds of investments and investing, in general, is The Wall Street Journal Guide to Understanding Money and Investing, written by Kenneth M. Morris and Virginia B. Morris. This is a short book that gives great explanations.

If you want to quickly educate yourself on the most important aspects of stock fraud from a legal perspective, you should read a small and highly valuable book by Franklin D. Ormsten, A Primer on Securities Arbitration Law. It’s currently out of print, but you may be able to find a copy using the World Cat library search.

Compensation May Be Available

As we stress throughout this site, the vast majority of investment fraud happens because a stockbroker or brokerage firm violates its duty to act in accordance with a customer’s best interests. In fact, the system by which stockbrokers and brokerage firms receive compensation promotes this kind of fraud.

Brokerage firms continue to pressure stock brokers to generate profits, commissions, bonuses, and fees to the detriment of consumers. Consequently, countless investors are falling victim to stock fraud and losing millions of dollars every day.

If you are the victim of stock fraud it is important to remember: You are not at fault, and compensation may be available.

Types of Compensation

Investors who lost money because of fraud or negligence may be eligible to receive payment for several types of compensation, including:

  • Financial losses
  • Interest
  • Brokerage and transaction fees paid
  • Attorney’s fees
  • Costs of pursuing the action
  • Punitive damages

Contact Us

If you are a stock fraud victim, if one of your family members has been the victim of stock fraud or if you have lost your financial independence due to a fraudulent investment and you have questions about what to do next, contact us for a free and totally confidential consultation.

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