Why choose arbitration over litigation?

Arbitration is typically faster, less formal, and more cost-effective than litigation. It also provides a final resolution to disputes, with limited grounds for appeal. Most relationships with financial advisors are formalized by entering into a contract which contains a dispute resolution clause. Nationally, most dispute resolution clauses provide for FINRA arbitration.

Who can file a FINRA arbitration claim?

Investors, brokerage firms, and financial advisors can file a FINRA arbitration claim if they have a dispute related to securities or investment activities. FINRA arbitration is normally the forum for disputes among registered persons, brokerage firms and the public customer clients of the firms.

How do I start the FINRA arbitration process?

To start the arbitration process, Bakhtiari & Harrison will file a Statement of Claim with FINRA, detailing the nature of the dispute, the parties involved, and the relief sought.

What is a Statement of Claim?

A Statement of Claim is a written document submitted by the claimant outlining the facts of the dispute, legal claims, and the desired outcome.

What happens after filing the Statement of Claim?

After filing, the respondent has 45 days to answer the Statement of Claim. The answer must address the claims and may include counterclaims or other relief sought.

What fees are involved in FINRA arbitration?

Fees include filing fees, hearing session fees, and possibly member surcharges or process fees, depending on the specifics of the case.

Can I represent myself in FINRA arbitration?

Yes, you can represent yourself, but many choose to hire an attorney with experience in securities arbitration due to the complexity of the process. Investors and industry professionals who choose to represent themselves do so at a substantial disadvantage, Wall Street firms typically retain experienced professional counsel to represent their interests.

How are arbitrators selected?

Arbitrators are selected through the Neutral List Selection System (NLSS), which provides a list of potential arbitrators. Both parties rank and strike names to agree on a panel.

What qualifications do FINRA arbitrators have?

FINRA arbitrators include attorneys, accountants, financial professionals, and public members who have undergone training and meet FINRA’s qualification standards.

How long does the arbitration process take?

The process typically takes 12-18 months from filing to the final award, but this can vary based on case complexity and scheduling. Preference may be given to investors that are seriously ill or elderly.

What is a prehearing conference?

A prehearing conference is a meeting between the parties and the arbitrators to discuss procedural issues, set a schedule, and address preliminary matters including final FINRA arbitration hearing dates.

What is discovery in arbitration?

Discovery is the exchange of documents and information between the parties to prepare for the hearing. It is more limited than in litigation.

What happens during the arbitration hearing?

During the hearing, both sides present evidence, call witnesses, and make arguments. The arbitrators then deliberate and render a decision.

Is the arbitration hearing open to the public?

No, arbitration hearings are private and confidential. Only the parties, their representatives, and the arbitrators may attend.

Can I settle my case before the hearing?

Yes, parties can settle at any time before the arbitrators render a decision, often through negotiation or mediation.

What is mediation in the context of FINRA arbitration?

Mediation is a voluntary process where a neutral mediator helps the parties negotiate a settlement. It is separate from arbitration and non-binding.

What happens if I lose in arbitration?

If you lose, the arbitrator’s decision is final and binding. There are limited grounds for challenging the award in court.

Can I appeal an arbitration decision?

Generally, you cannot appeal an arbitration decision. However, you can seek to vacate the award on very narrow grounds, such as arbitrator misconduct.

What types of disputes are resolved through FINRA arbitration?

Disputes include claims of fraud, breach of fiduciary duty, negligence, breach of contract, and other issues related to securities and investments.

How are damages determined in arbitration?

Damages are determined based on the evidence presented, including financial records, expert testimony, and the specifics of the case.

Can arbitrators award attorney’s fees?

Arbitrators can award attorney’s fees if provided for by law, contract, or if both parties request it.

How do I enforce an arbitration award?

An arbitration award can be enforced in court through a confirmation process, making it a judgment that can be collected.

What is expungement in FINRA arbitration?

Expungement is the process of removing information from a broker’s record on the Central Registration Depository (CRD) system. It is only granted under specific conditions.

What are the grounds for vacating an arbitration award?

Grounds for vacating an award include arbitrator bias, fraud, corruption, or misconduct, as well as exceeding their powers.

Are arbitration awards public?

Yes, arbitration awards are published on FINRA’s website, providing transparency and access to past decisions.

What is the role of the Office of Dispute Resolution?

The Office of Dispute Resolution administers arbitration and mediation cases, ensuring that the process runs smoothly and efficiently.

What is a Simplified Arbitration?

Simplified Arbitration is for cases involving claims of $50,000 or less, allowing for a quicker and less expensive resolution without a hearing.

Can I request an expedited hearing?

Yes, in certain circumstances, such as elderly or seriously ill parties, you can request an expedited hearing.

What is the role of an arbitrator?

An arbitrator acts as a neutral decision-maker, reviewing evidence, hearing testimony, and issuing a binding decision on the dispute.

How do I prepare for an arbitration hearing?

Preparation involves gathering evidence, preparing witnesses, and developing a clear case strategy to present to the arbitrators.

What types of evidence are admissible in arbitration?

Evidence can include documents, emails, financial records, expert reports, and witness testimony, subject to the arbitrators’ discretion.

Can I request documents from the other party?

Yes, through the discovery process, you can request relevant documents and information from the other party to support your case.

How does FINRA handle conflicts of interest with arbitrators?

FINRA requires arbitrators to disclose any potential conflicts of interest, and parties can object to arbitrators they believe are biased.

What happens if a party does not comply with discovery?

If a party does not comply, the other party can file a motion to compel, asking the arbitrators to order compliance and possibly impose sanctions.

What is a motion in arbitration?

A motion is a formal request for the arbitrators to make a ruling on a specific issue, such as compelling discovery or dismissing a claim.

Can I request interim relief in arbitration?

Yes, you can request interim relief, such as temporary restraining orders or injunctions, to preserve the status quo pending the final decision.

How are hearing locations determined?

Hearing locations are typically determined by the location of the claimant unless both parties agree to a different venue.

What is a telephonic or virtual hearing?

Telephonic or virtual hearings are conducted via phone or video conference, allowing parties to participate remotely.

How are arbitration awards paid?

Awards are typically paid by the losing party within 30 days of the decision, unless otherwise specified by the arbitrators.

What if the losing party does not pay the award?

If the losing party does not pay, you can seek enforcement through the courts, turning the award into a legally enforceable judgment.

Are there any limits on the types of claims I can bring in arbitration?

FINRA arbitration covers a broad range of claims related to securities, but there are some statutory and regulatory limits on certain types of claims.

Can I bring a class action in FINRA arbitration?

No, class actions are not permitted in FINRA arbitration. However, you can join other claimants in a single arbitration if the claims are similar.

What is the role of expert witnesses in arbitration?

Expert witnesses can provide specialized knowledge and opinions to help explain complex financial issues to the arbitrators.

How are hearing dates scheduled?

Hearing dates are scheduled based on availability of the parties and arbitrators, with consideration for the complexity of the case.

Can I request a different arbitrator if I believe one is biased?

Yes, you can challenge an arbitrator if you believe they have a conflict of interest or bias that affects their impartiality.

What is a “chairperson” in a FINRA arbitration panel?

The chairperson is the lead arbitrator who manages the procedural aspects of the case and ensures the hearing runs smoothly.

How does FINRA ensure fairness in arbitration?

FINRA has rules and procedures in place to ensure a fair and impartial process, including arbitrator training and disclosure requirements.

How do I learn more about the FINRA arbitration process?

For more information, you can visit FINRA’s website, contact their Office of Dispute Resolution, or consult with experienced attorneys like those at Bakhtiari & Harrison.

How can Bakhtiari & Harrison help with FINRA arbitration?

Bakhtiari & Harrison can assist with filing claims, responding, selecting arbitrators, discovery, hearings, and ensuring the best possible outcome through skilled representation and strategic advice.

Unsuitable Investment Attorney Los Angeles CA: 3 Essential Steps After Unsuitable Investments

Life can throw unexpected curveballs, and sometimes, those curveballs manifest in the form of investment fraud by individuals you deeply trusted with your financial future. Imagine dedicating years to building a nest egg, only to discover that your stockbroker, who was supposed to offer sound financial guidance, engaged in actions that were not in your best interest. Perhaps you’ve taken over a parent’s stock account and uncovered a series of questionable transactions and trades that seem to defy logic, given their financial goals and risk tolerance.

This scenario, unfortunately, is more common than many realize. When investment strategies or individual trades are not aligned with an investor’s true financial situation, age, and objectives, they are often deemed “unsuitable.” If you find yourself facing this frustrating and potentially devastating situation in Southern California, understanding your options and knowing when to connect with an Unsuitable Investment Attorney Los Angeles CA is crucial. Bakhtiari & Harrison is here to help you navigate this complex terrain.

Table of Contents

A Promise Broken, A Future Jeopardized

You worked hard for your money, or perhaps your parents did. You sought professional guidance because you wanted to grow your wealth responsibly, protect your assets, and secure a comfortable future. You trusted your stockbroker to act as your financial guide, to understand your unique circumstances, and to recommend investments that genuinely served your goals, not their own.

But what happens when that trust is violated? What if the financial advisor you believed in prioritized their commissions over your financial well-being? This fundamental breakdown of trust can lead to significant financial losses, eroding years of careful planning and hard-earned savings.

The heart of the issue frequently centers on unsuitable investments and inappropriate trading strategies, particularly when private placements are involved. This isn’t merely about an investment underperforming due to market volatility—such fluctuations are expected, and losses can occur. It’s about a broker recommending or executing trades, including private placements, which are fundamentally inconsistent with your (or your parent’s) investor profile. This might include:

Excessive risk: Placing an elderly client, or someone with a low-risk tolerance, into volatile, high-risk investments like speculative stocks, options, or complex derivatives.
Over-concentration: Putting too much of an investor’s portfolio into a single stock, industry, or asset class, rather than diversifying to mitigate risk.
Churning: Making an excessive number of trades in an account solely to generate commissions for the broker, regardless of the investment’s performance or the client’s best interest.
Misrepresentation or omission: Providing false information or failing to disclose crucial details about an investment’s risks, liquidity, or potential for loss.
Unauthorized trading: Executing trades without the client’s explicit permission.

These actions are more than just poor judgment; they can constitute a breach of the broker’s professional duties and can lead to significant financial harm.

Bakhtiari & Harrison – Your Path to Resolution

When you discover that your financial trust has been betrayed, the path forward can seem daunting. You might feel overwhelmed, angry, and unsure of where to turn. This is precisely where Bakhtiari & Harrison steps in as your unwavering guide. We understand the distress and confusion that come with uncovering unsuitable investments and inappropriate trading by a stockbroker.

At Bakhtiari & Harrison, we are more than just legal professionals; we are dedicated advocates for investors seeking justice in cases of investment fraud. Our extensive experience in securities arbitration and litigation offers the clarity and support you need during such challenging times. Our mission is clear: to hold negligent stockbrokers and brokerage firms accountable for their fraudulent actions and to assist you in securing the recovery you rightfully deserve. If you are searching for an Unsuitable Investment Attorney Los Angeles CA, our firm is ready to support you every step of the way.

The Plan: A Clear Path to Accountability

Navigating a claim against a stockbroker or brokerage firm requires a clear, strategic approach. At Bakhtiari & Harrison, our plan is designed to empower you and pursue the most favorable outcome for your situation.

Step 1: Complimentary Case Evaluation. The initial step is to comprehensively understand your situation. We provide a complimentary, confidential consultation to thoroughly examine the specifics of your parent’s stock account, scrutinize the trades under question, and evaluate the investment losses stemming from unsuitable investments. This preliminary discussion enables us to evaluate the validity of your potential claim and strategize the optimal approach forward. This crucial first step is essential when you’re in search of an Unsuitable Investment Attorney Los Angeles CA.

Step 2: Comprehensive Investigation and Evidence Gathering. If your case moves forward, our team will meticulously investigate all aspects of your stockbroker’s conduct. This involves:

Reviewing account statements and trade confirmations: Spotting patterns of excessive trading, concentrated positions, or other indicators of unsuitable investment products.
Analyzing suitability documents: Examining your parent’s investor profile, risk tolerance assessments, and investment objectives to demonstrate how the trades deviated from these guidelines.
Reviewing communications: Looking for emails, notes, or other records that shed light on the broker’s recommendations and your parent’s instructions.
Assessing damages: Calculating the financial losses directly attributable to unsuitable investments and inappropriate trading.

This thorough evidence gathering is the bedrock of a strong claim against a negligent stockbroker.

Step 3: Pursuing Resolution Through FINRA Arbitration or Litigation. Most disputes between investors and stockbrokers are resolved through arbitration, primarily under the securities law framework governed by the Financial Industry Regulatory Authority (FINRA). FINRA arbitration serves as a more streamlined process than traditional court litigation, designed to efficiently resolve disputes. Our attorneys, equipped with extensive experience in securities law, are well-versed in FINRA arbitration procedures. We will meticulously prepare your case, craft compelling arguments, and aggressively pursue your claim to seek compensation for losses caused by unsuitable investments. In some cases, litigation in state or federal court may be the more suitable route, and our team is ready to pursue that path if necessary.

Take Control of Your Financial Future

The feeling of betrayal and financial vulnerability can be overwhelming, especially when misguidance from a financial advisor is involved. However, you don’t have to navigate this complex situation alone. Taking decisive action is crucial in reclaiming control over your financial peace of mind. Contact unsuitable investment attorney Los Angeles CA based Bakhtiari & Harrison can help.

Don’t wait. There are often strict time limits (statutes of limitations) for filing claims related to unsuitable investments and stockbroker misconduct. Delaying action could jeopardize your ability to recover losses.

If you suspect your parent’s stock account, or even your own, has suffered due to unsuitable investments or inappropriate trading strategies by a stockbroker, it’s time to act.

Contact Bakhtiari & Harrison today for a free and confidential consultation.

Our experienced team of investment fraud lawyers is ready to listen to your story, evaluate your situation, and provide the guidance you need. Let us be your Unsuitable Investment Attorney Los Angeles CA.

The Success: Restoring Your Financial Security

Imagine the relief of knowing that you have taken decisive steps to address the financial harm caused by a negligent stockbroker. The successful outcome of a claim for unsuitable investments can mean:

Recovery of losses: Recouping the money you or your parent lost due to the stockbroker’s misconduct.
Accountability: Holding the responsible parties, including the stockbroker and their firm, accountable for their professional duties and ethical obligations.
Peace of mind: Gaining a sense of closure and security, knowing that you’ve addressed the situation and protected your financial future.

At Bakhtiari & Harrison, our commitment is to help you achieve these positive outcomes. We understand the profound impact that financial losses can have on individuals and families, especially when caused by those who were trusted. Our goal is to fight for the justice and recovery you deserve, helping you move forward with confidence. We are the Unsuitable Investment Attorney Los Angeles CA that will stand by you.

Avoiding Failure: The Risks of Inaction

Failing to address signs of investment fraud, including unsuitable investments or inappropriate trading can lead to continuous and increasing financial setbacks. Without prompt intervention from an investment fraud lawyer, the money lost through a broker’s misconduct may remain unrecovered. Delaying action risks missing critical deadlines for filing a claim, thus losing the opportunity to seek justice. Moreover, postponement can hinder the collection of vital evidence and cloud the recollection of specific details, further complicating your case.

Don’t let fear or uncertainty stop you from safeguarding your financial future. Taking swift action with a knowledgeable Unsuitable Investment Attorney in Los Angeles, CA, such as Bakhtiari & Harrison, is the most reliable way to avoid the detrimental effects of inaction, tackle securities fraud, and pursue the compensation you deserve.

California FINRA lawyers at Bakhtiari & Harrison proudly serve clients throughout major cities in California including Bel Air, Beverly Hills, Beverlywood, Brentwood, Culver City, Encino, Hancock Park, Hidden Hills, Hollywood Hills, Los Angeles, Malibu, Manhattan Beach, Orange County, Pacific Palisades, Palm Springs, Pasadena, San Diego, San Francisco, Santa Barbara, Santa Monica, Sherman Oaks, Studio City, Toluca Lake, Ventura County, ensuring that investors have access to top-tier legal representation regardless of their location.

Questions & Answers

1. What does “unsuitable investment” mean? An unsuitable investment refers to a financial product or strategy recommended by a stockbroker that does not align with an investor’s stated financial goals, risk tolerance, age, or financial situation. Brokers have a duty to recommend suitable investments.

2. How can I tell if my stockbroker made unsuitable trades? Signs of unsuitable investments or trades can stem from various actions by a financial advisor, including excessive trading (often referred to as churning), recommending high-risk investments when you’re a conservative investor, over-concentration in a single asset class, or executing trades without your explicit understanding or consent. If your investment portfolio exhibits these patterns that don’t align with your financial objectives, it serves as a significant red flag.

3. What is the role of an Unsuitable Investment Attorney Los Angeles CA? An Unsuitable Investment Attorney Los Angeles CA helps investors who have suffered losses due to a stockbroker’s misconduct, including the recommendation or execution of unsuitable investments. They investigate claims, gather evidence, and represent clients in arbitration (often FINRA) or litigation to seek recovery of losses.

4. Can I sue my stockbroker for unsuitable investments? In most cases, disputes with stockbrokers are resolved through FINRA arbitration, not traditional lawsuits in court, due to clauses in brokerage agreements. An Unsuitable Investment Attorney Los Angeles CA can guide you through the appropriate dispute resolution process.

5. What is FINRA arbitration, and how does it relate to unsuitable investments? FINRA arbitration serves as a key platform for addressing conflicts between investors and brokerage firms. In cases where securities fraud occurs due to a stockbroker making unsuitable investments, investors often turn to FINRA to file a claim. An arbitration panel then deliberates on the dispute to provide resolution.

6. How long do I have to file a claim for unsuitable investments? The time limit for filing a claim for unsuitable investments (known as the statute of limitations or eligibility period in arbitration) can vary. It’s crucial to consult with an Unsuitable Investment Attorney Los Angeles CA promptly to understand the specific deadlines applicable to your case.

7. What kind of losses can I recover from unsuitable investments? If successful, you may be able to recover financial losses directly caused by the unsuitable investments, including the original investment amount, lost profits, and in some cases, interest or other damages.

8. What should I do if I suspect my parent’s stock account has unsuitable investments? If you discover unsuitable investments or questionable trades in a parent’s stock account, document everything. Collect account statements, trade confirmations, and any communications with the broker. Then, reach out to the experienced team at Bakhtiari & Harrison in Los Angeles for a consultation with an Unsuitable Investment Attorney.

9. How can I research a stockbroker’s history before investing? You can research a stockbroker’s background and disciplinary history using FINRA BrokerCheck. This free tool allows you to check if a person or firm is registered, view their employment history, regulatory actions, and customer complaints.

10. Do I need an attorney for a FINRA arbitration claim involving unsuitable investments? While it is not mandatory to have legal representation for FINRA arbitration, the process can be intricate and challenging. Enlisting the help of an Unsuitable Investment Attorney Los Angeles CA can drastically enhance your likelihood of achieving a favorable resolution, as they possess expertise in dealing with the rules, procedures, and strategies pertinent to cases involving unsuitable investments and investment fraud.