Getting To Know Your Legal Relationship With Your Stockbroker

So you've noticed that your stock portfolio has taken a turn for the worse. While many stock and investment-related problems arise from fluctuations within the market, some situations may warrant further investigation to see whether or not your stocks have been mishandled. Some stock brokers may have charged excessive commissions, misinformed you about specific investments or even committed outright fraud. Investment fraud, believe it or not, is more common than most of us realize. As they say, prevention is better than cure, so always do thorough research on your investment firms and their history before getting too involved. If you suspect a problem, use these simple tips about what to do if your stocks have been mishandled by your broker.

Consult with Your Investment Firm

Before attempting to take any legal action, consult with someone at your investment firm to resolve the problem. If you are unable to come to an understanding with your broker, contact someone in management.

Because the arbitration process is complicated and could take months or years to complete, speaking with someone at the investment firm is important before taking any other steps. You'll want to thoroughly seek out the issue to make sure that you have a case and that you avoid legal action if there is a misunderstanding, or if it can be resolved out of court.

The Arbitration Process

If nothing has been resolved by personally speaking to your firm, the next step is to go to arbitration.

Arbitration is a process that's administered by the Financial Industry Regulatory Authority, also known as FINRA. Your case will be filed with them and a date will be set for your hearing.

Often times, legal representation is needed in such situations. Consult a lawyer that is familiar with investment fraud and ask them if they see anything that you haven't noticed. They will be able to tell you whether or not you have a valid case that is worth pursuing. When you do go to arbitration, make sure your lawyer is comfortable in such situations and that you have at least one expert witness to testify on your behalf.

How to File

Filing a request for arbitration has been made relatively simple. Investors can visit the FINRA website to begin the process or search for similar cases that have been filed against their broker.

Cases that are for amounts less than $25,000 are usually handled by a single arbitrator and will only require a small amount of paperwork. Generally, a hearing is not necessary in such cases.

Cases that are for amounts greater than $25,000 are handled by a selected panel of three arbitrators and will take more time to process because of the necessity of a hearing.

The arbitration process has become more simplified over recent years, and the team at Starr Austen will be able to assist with any needs that arise during the arbitration process. Some investors can file claims by themselves. Consulting a lawyer is necessary once your case has been filed. Regardless of the size of your investment fraud case.