California Investment Fraud Lawyer, Securities Attorneys, SEC & FINRA Securities Law Firm
California investment fraud lawyers Bakhtiari & Harrison are a premier law firm focused on the representation of California-based clients in FINRA arbitration and litigation in matters involving the securities industry. The firm’s partners have substantial experience in securities, employment, and regulatory matters. Our focus is on delivering strategic and creative client-centric solutions and providing results to our clients. Across four decades we’ve developed a niche practice, we represent individuals and institutions in securities arbitration and litigation claims before FINRA (the Financial Industry Regulatory Authority, AAA (American Arbitration Association) and in state and federal courts around the country.
Retaining an attorney and law firm is an important decision made with great care, in fact the retention of counsel after a dispute arises maybe the single most important decision a potential litigant makes. The Importance of Selection of Counsel cannot be overstated, please read our more detailed description concerning our qualifications, experience and credentials.
Aggressive Securities and Investment Fraud Lawyers
At Bakhtiari & Harrison, we focus on quality, aggressive advocacy, rigorous preparation, and client-focused results. We bring decades of experience and the resources to offer personalized service tailored to your needs. We understand the unique needs and concerns of each client and implement an effective and compelling strategy from the outset. How can a California investment fraud lawyer assist you?
In the complex world of securities trading, adherence to legal and ethical standards is paramount. California has established a robust legal framework to ensure the integrity of its financial markets and protect investors from malpractices. California investment fraud lawyers focus on common violations under the California Securities Code, including suitability, unauthorized trading, misrepresentations, failure to disclose, and unfair business advantage. If you have been exposed to misconduct in the securities industry and experienced financial loss, California investment fraud lawyers at Bakhtiari & Harrison may be able to assist you.
Common Customer Claims
Suitability Under California Securities Law and FINRA Rules
One of the fundamental principles under the California Securities Code is the requirement for investment advisers and brokers to ensure that their investment recommendations are suitable for their clients. Advisers must consider the client’s financial situation, investment objectives, and risk tolerance when making recommendations. This “suitability” standard mandates a thorough understanding of the client’s needs and the characteristics of the investments being recommended. The suitability rule is also codified in FINRA’s rules, policies, and procedures. Each firm educates and supervises its employees and customer accounts to make sure that suitable investments are recommended to their customers.
A violation occurs when a broker or adviser recommends unsuitable investments by failing to consider the client’s unique circumstances. Investing client assets in vehicles that carry excessive risk or volatility can lead to significant financial losses for the client and potential legal liability for the adviser and firm. California investment fraud lawyers gather the evidence and present it along with arguments to persuade arbitrators of the lack of suitability. The California suitability requirement is integral to protecting investors from inappropriate and potentially harmful investment strategies. Recently, the enactment of FINRA’s Regulation Best Interest or “Reg BI” provides additional investor enhancements.
Unauthorized Trading in California
Unauthorized trading is explicitly prohibited under California Corporations Code § 25235. This section mandates that brokers obtain explicit consent from clients before executing trades on their behalf. Unauthorized trading involves executing transactions without the client’s knowledge or approval, breaching the fiduciary duty that brokers owe to their clients.
This violation can result in severe financial consequences for the client and disciplinary action against the broker, including fines, suspension, or revocation of their license. Ensuring that clients are fully aware of and approve all transactions is critical to maintaining trust and compliance with California securities regulations. California investment fraud lawyers Bakhtiari & Harrison represent victims of investment fraud and abuse of discretion. Exercising unlawful time and price discretion can be another form of unauthorized trading. California investment fraud lawyers commonly prosecute these civil claims.
Misrepresentations or Omissions Under California Securities Law
California Corporations Code § 25401 addresses misrepresentations and omissions of material facts in the sale of securities. Brokers and advisers are prohibited from making false statements or omitting crucial information that could affect an investor’s decision-making process. Misrepresentations can include false claims about the financial health of a company, the risks associated with an investment, or the expected returns.
Investors rely on accurate and complete information to make informed decisions. Any deviation from this standard undermines market integrity. California investment fraud lawyers Bakhtiari & Harrison represent victims of investment fraud that has caused significant investor harm. Violations of California § 25401 can result in civil liabilities, including rescission of transactions and monetary damages.
Failure to disclose material information is closely related to misrepresentations and is governed by the same section, California Corporations Code § 25401. California investment fraud lawyers Bakhtiari & Harrison represent victims of investment fraud or omissions in disclosing material facts. This provision requires full and fair disclosure of all relevant information that an investor would need to make an informed decision. Failure to disclose such information is considered fraudulent and deceptive.
Material information can include details about the financial performance of an investment, potential conflicts of interest, or any other fact that could influence an investor’s decision. Transparency is essential in the securities industry, and failure to uphold this standard can lead to legal action and penalties.
Other California Code Violations that Occur
Several other common violations under the California Securities Code relate to trading securities, including:
- Churning: Excessive trading in a client’s account primarily to generate commissions for the broker, violating fiduciary duties as outlined in California Corporations Code § 25218.
- Front-Running: Brokers executing orders on a security for their own account while taking advantage of advance knowledge of pending orders from their customers, which can violate California Corporations Code § 25216(a).
- Ponzi Schemes: Investment frauds that pay returns to earlier investors from the new capital contributed by newer investors rather than from profit earned, falling under fraudulent schemes addressed by California Corporations Code § 25401.
- Insider Trading: Trading a public company’s stock or other securities based on material, non-public information about the company, violating fair market practices as described in California Corporations Code § 25502.
- Failure to Supervise: Supervisors failing to adequately oversee the actions of brokers, leading to various forms of misconduct, which is addressed under California Corporations Code § 25216(c).
What is FINRA Arbitration and How Does it Work?
FINRA arbitration starts when one party, known as the “claimant,” files a statement of claim. This could be an investor who thinks their broker acted unfairly or broke the rules. The person accused, called the “respondent,” then responds to the claim. Here are the basic steps of FINRA arbitration:
- Filing a Claim: The claimant explains the dispute and what happened. The respondent has time to answer the statement of claim.
- Selecting Arbitrators: Arbitrators are neutrals who make the final decision in the case. For smaller cases, there may be a single arbitrator, while larger cases might have three. This is a key moment in the life of every case. Experienced California investment fraud lawyers at Bakhtiari & Harrison have appeared before many of the arbitrators found in California-based pools for decades.
- Pre-Hearing Conferences and Discovery: Before the hearing, both sides share documents and information to prepare their cases. This is called discovery.
- Hearing: At the hearing, both sides present their case, bring in evidence, and question witnesses. The California investment fraud lawyers at Bakhtiari & Harrison aggressively advocate for our clients. The arbitrators listen to the evidence presented by both sides and render an award.
- Award: After the hearing, the arbitrators make a decision and issue what’s called an award. This decision is final, and both parties must follow it.
Investors Should Contact Our Experienced California Investment Fraud Lawyers
If you’ve been the victim of investment fraud, contact the California investment fraud lawyers at Bakhtiari & Harrison for a free initial consultation. We represent victims of financial and investment disputes throughout California, including Bel Air, Beverly Hills, Brentwood, Culver City, Encino, Hancock Park, Hidden Hills, Hollywood Hills, Los Angeles, Malibu, Orange County, Pacific Palisades, Palm Springs, Pasadena, San Diego, San Francisco, Santa Barbara, Studio City, Toluca Lake, Ventura County and other locations. Our California investment fraud lawyers will work tirelessly in pursuit of financial compensation for your investment losses.