FINRA Arbitration

FINRA Arbitration

The Financial Industry Regulatory Authority (FINRA) was formed on August 6, 2007 to combine the regulatory resources of the New York Stock Exchange (NYSE) and National Association of Securities Dealers (NASD). FINRA is charged with the responsibility to resolve disputes between public investors, member firms and firm employees. FINRA is subject to oversight by the Securities Exchange Commission (SEC). FINRA establishes rules and regulations for the standards of care required for the handling of customer accounts. Brokerage firms and its financial advisors are required to submit themselves to binding arbitration as a way of resolving disputes the firms have with customers of theirs. The FINRA arbitration dispute resolution process is designed to protect investors from brokerage firms and its financial advisor misconduct, known as sales practice violations which results in investment losses.

Failure of brokerage firms and its financial advisors to comply with FINRA sales practice rules and regulations may result in a legal cause of action for the recovery of investment losses. Brokerage firms and financial advisor misconduct can be classified according to various types of activities which may result in a legal cause of action against them. The FINRA sales practice violations are often classified according to the following types of misconduct.

Unsuitable Investment Advice

“Financial advisors must consider client needs before recommending investments”.

Unsuitable Investment Advice

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Negligence

"Financial advisors are negligent for failure to adhere to securities industry standards.”

Negligence

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Excessive Trading or "Churning"

"Excessive trading from advice designed to enrich the financial advisor.”

Excessive Trading or "Churning"

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Misrepresentation

“Financial advisors have a duty to disclose all material facts.”

Misrepresentation

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Breach of Fiduciary Duty

"Customers rely upon what their financial advisors tell them.”

Breach of Fiduciary Duty

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Unauthorized Trading

"Financial advisors must receive prior authorization for all account transactions.”

Unauthorized Trading

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Margin Abuse

“Margin loans expose investors to greater risk and costs.”

Margin Abuse

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Securities Concentration

“Investors must avoid concentration in a single security or investment product.”

Securities Concentration

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Mutual Fund Violations

“Must recommend a mutual fund share class that is most suitable for customers.”

Mutual Fund Violations

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Variable Annuity Switching

“Replacements result in longer surrender periods, surrender charges and greater costs.”

Variable Annuity Switching

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Failure to Supervise

“Adequate supervision is the first line of defense to protect the investors.”

Failure to Supervise

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Conflicts of Interest

“Financial advisors have a duty to identify and disclose any potential conflicts of interest.”

Conflicts of Interest

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Excessive Markups / Markdowns

“Prices paid should consider whether commissions paid are fair and reasonable.”

Excessive Markups/Markdowns

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Private Placements (Reg D)

“Private placements provide limited information for investors to evaluate.”

Private Placements (Reg D)

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Private Securities Transactions

“Private securities are investments not approved by brokerage firms.”

Private Securities Transactions

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    DO YOU HAVE A CASE?
    Contact Us for a Free Consultation
    Call 1-888-997-9956 Now