Skip to main content

Free Consultation:

Maryland Investment Fraud Lawyers & FINRA Attorneys

Maryland Investors Rely on Bakhtiari & Harrison to Represent thier Interests in FINRA Arbitration and Litigation Regarding Financial Advisors and the Securities Industry

Maryland investment fraud lawyers at Bakhtiari & Harrison are focused on the representation of Maryland based clients in complex arbitration, litigation, and related legal services in matters involving the securities industry. The firm’s partners have extensive experience in securities, employment and regulatory matters. Our focus is on delivering strategic and creative client-centric solutions.

We represent individuals and institutions in securities arbitration and litigation claims before FINRA (Financial Industry Regulatory Authority, AAA (American Arbitration Association) and other arbitration providers.

How a Maryland Investment Fraud Lawyer Can Help You

If you have experienced financial loss, and are searching for a Maryland investment fraud lawyer, Bakhtiari & Harrison may be able to assist you. We represent Maryland based investors and clients with these and other types of investment fraud and financial advisor misconduct cases.

Understanding Securities Code Violations in Trading Securities under Maryland Law

In the complex world of securities trading, adherence to legal and ethical standards is paramount. Maryland has established robust legal frameworks to ensure the integrity of their financial markets and protect investors from malpractices. Maryland investment fraud lawyers at Bakhtiari & Harrison will delve into some common violations under relevant Maryland statutes, including suitability, unauthorized trading, misrepresentations, failure to disclose, and unfair business advantage.

Suitability under Maryland Securities Law

A violation occurs when a broker or adviser recommends unsuitable investments, failing to consider the client’s unique circumstances. Such actions can lead to significant financial losses for the client and potential legal liability for the adviser. The Maryland suitability requirement is integral to protecting investors from inappropriate and potentially harmful investment strategies.

Maryland requires investment advisers to act in the best interests of their clients. Under the Maryland Securities Act, advisers must not mislead or deceive clients regarding investment suitability. Ensuring recommendations align with clients’ financial goals and risk tolerance is critical.

Unauthorized Trading under Maryland Securities Law

The Maryland Securities Act also prohibits unauthorized trading. Brokers must secure client consent before executing any trades. Violations can result in criminal penalties, fines, and the potential loss of licensure.

Misrepresentations Under Maryland Securities Law

Similarly, under the Maryland Securities Act, it is unlawful for any person to misrepresent or omit material facts in connection with the sale of securities. This includes false statements about the value or safety of an investment. Maryland investment fraud lawyers at Bakhtiari & Harrison represent investors. Maryland investment fraud lawyers at Bakhtiari & Harrison represent investors. Violations can lead to severe penalties, including fines and imprisonment.

Maryland’s Securities Act also mandates full disclosure of all material information to investors. Failure to disclose can result in criminal and civil penalties, aiming to protect investors from fraud and deception.

Unfair Business Advantage under Maryland Securities Laws

In Maryland, similar protections are provided under the Maryland Consumer Protection Act, which prohibits deceptive acts and practices in the conduct of business, including securities trading. This includes insider trading, market manipulation, and other unfair practices.

Common Maryland Code Violations

Several other common violations under relevant Maryland statutes include:

Churning: Excessive trading in a client’s account primarily to generate commissions for the broker. This violates fiduciary duties under Maryland’s Securities Law.
Front-Running: Brokers executing orders on a security for their own account while taking advantage of advance knowledge of pending orders from their customers. This can violate Maryland statutes.
Ponzi Schemes: Investment frauds that pay returns to earlier investors from new capital contributed by newer investors, rather than from profit earned. These schemes are addressed by Maryland’s Securities Law. Maryland investment fraud lawyers at Bakhtiari & Harrison represent investors.
Insider Trading: Trading a public company’s stock or other securities based on material, non-public information about the company. This violates fair market practices as described in Maryland’s Securities Law.
Failure to Supervise: Supervisors failing to adequately oversee the actions of brokers, leading to various forms of misconduct. This is addressed under Maryland’s financial regulations.

Understanding and adhering to these laws and regulations in Maryland is crucial for maintaining market integrity and protecting investors from fraud and malpractice.

Maryland Based Clients Should Contact Our Experienced Securities Fraud Lawyers Now

If you’ve been the victim of investment fraud, contact the Maryland investment fraud lawyers of Bakhtiari & Harrison for a free initial consultation. We represent victims of financial and investment disputes throughout Maryland, including Baltimore, Columbia, Germantown, Silver Spring, and Waldorf, as well as clients in neighboring states. Maryland investment fraud lawyers at Bakhtiari & Harrison will work tirelessly in pursuit of financial compensation for your investment losses.

What Is FINRA Arbitration?

FINRA arbitration is a method of resolving disputes between investors, brokerage firms, and financial advisors without going through the traditional court system. The process is administered by the Financial Industry Regulatory Authority (FINRA), the self-regulatory organization responsible for regulating broker-dealers and maintaining standards within the U.S. securities industry. Because most brokerage account agreements require customers to settle disputes through arbitration rather than litigation, FINRA arbitration has become the primary forum for investor claims in the United States.

In simple terms, FINRA arbitration is intended to provide a more efficient and less formal alternative to a lawsuit. When investors believe they have suffered financial harm due to broker misconduct—such as unsuitable investment recommendations, misrepresentation, excessive trading, or failures in supervision—they may file a claim through FINRA’s dispute resolution system. Brokerage firms and registered representatives that are members of FINRA are typically obligated to participate in the arbitration process when a customer files a claim.

The FINRA Process

The arbitration process begins when the investor submits a Statement of Claim to FINRA. This document outlines the relevant facts of the dispute, the alleged wrongdoing, and the amount of damages the claimant is seeking. After the claim is filed, the brokerage firm or broker—referred to as the respondent—files an Answer addressing the allegations. FINRA then assigns a panel of arbitrators to hear the case. Depending on the size of the claim, the panel may consist of one arbitrator or three arbitrators. These individuals are neutral decision-makers selected from FINRA’s roster and may include both public arbitrators and arbitrators with industry experience.

Once the arbitrators are selected, the case proceeds through several stages that resemble aspects of litigation. The parties exchange documents and participate in pre-hearing conferences that address scheduling and procedural matters. However, arbitration generally involves fewer procedural steps than court litigation. Discovery is more limited, and the process is structured to move more efficiently than a traditional lawsuit.

Eventually, the matter proceeds to an evidentiary hearing where both sides present their arguments. Witness testimony, documents, and other evidence may be introduced for the arbitrators’ consideration. After reviewing the evidence and hearing the arguments of both parties, the arbitration panel deliberates and issues a written decision known as an arbitration award.

This award determines whether the claimant is entitled to compensation and, if so, the amount that should be paid. Arbitration awards are typically final and binding, meaning they cannot easily be appealed. Courts may only overturn an arbitration award under very narrow circumstances, such as evidence of fraud, bias, or serious procedural misconduct.

The Role of FINRA Arbitration in Dispute Resolution

FINRA arbitration plays an important role in the securities industry because it offers investors a forum to seek recovery when financial losses result from broker misconduct. At the same time, brokerage firms benefit from a dispute resolution process that is often faster and less costly than traditional litigation. While some critics argue that mandatory arbitration limits investors’ ability to bring claims in court, supporters contend that arbitration provides a practical and accessible system for resolving disputes.

Overall, FINRA arbitration functions as the primary mechanism for resolving conflicts between investors and brokerage firms. Through a structured yet streamlined process overseen by FINRA, arbitration is intended to deliver fair outcomes while supporting confidence in the integrity of U.S. financial markets. Maryland investment fraud laywers at Bakhtiari & Harrison will work tirelessly in pursuit of financial compensation for your investment losses, contact us.