Can I Sue My Broker for Investment Losses? - KlaymanToskes (2024)

Updated on: March 19, 2024

Unlike traditional lawsuits, investment losses are handled through FINRA arbitration.

Why?

The FINRA arbitration process was built to handle disputes between investors and brokers. The process is faster, less expensive and more efficient than traditional lawsuits. Moreover, many brokerage agreements require that disputes be resolved through arbitration.

What are the Grounds for “Suing” my Broker?

There must be grounds for you to take legal actions against your broker, regardless of whether you choose traditional litigation or arbitration. (Although, if you are seeking to recover investment losses, it is in your best interest to pursue FINRA arbitration.)

It’s important to note that losing money in an investment account is not in itself grounds for a successful legal claim.

Successful legal claims against brokers typically need both:

• Damages (investment losses) in your investment account.
• Evidence that the actions (or inactions) of your broker caused those losses.

In essence, your broker must have taken a specific action or failed to act, resulting in direct financial loss for you. This crucial element, known as “causation,” is integral to any case where an investor is seeking to recover losses from their broker.

Investment losses? We can help.Contact us at (888) 997-9956 for a free consultation to discuss your potential claim.

What is the Statute of Limitations for Suing my Broker?

The statute of limitations sets the deadline for filing a legal claim, usually allowing investorssix (6) years from the alleged misconduct or two years from the discovery (or when discovery should reasonably occur) of the misconduct. Keep in mind that this timeframe can vary based on the state and the type of claim. Seeking guidance from a legal professional specializing in securities law is crucial to ensure compliance with filing deadlines.

What Level of Investment Losses Can I Sue For?

There is no specific threshold for investment losses that qualifies an investor to pursue legal action against their broker.However, it is generally understood that significant losses, usually over $100,000, are more likely to have a strong case for recovery.

You may not be the best qualified to assess whether your losses are significant enough to justify legal action against your broker. Some losses may seem small at first but, upon further investigation, could reveal a larger pattern of broker misconduct that warrants legal action.

As such, the typical investor may not be fully aware of the extent of their losses and whether they have a strong enough case for recovery.

Ourstockbroker fraud attorneysatKlaymanToskeshave extensive experience working with investors to assess their losses and determine if they have grounds for legal action against their broker. While the best way to determine if you are eligible for recovery is tospeak with one of our attorneys, we understand that many investors may be hesitant to take that first step.

As such, we providefree consultationsto discuss your potential claim and inform you of your options. In addition, we’ve compiled a list of common behaviors we’ve seen from brokers that may indicate you have grounds for legal action.

Signs Investors Should Look Out For About Their Brokerage Accounts

As an investor, there are a few signs that you should look out for if you believe you may have a claim against your broker. These signs could potentially indicate misconduct, negligence, or investment fraud.Investors are encourage to contact our firm immediately if you have experienced any of the following:

• You have substantial losses in your investment accounts
• You notice unauthorized transactions in your investment accounts
• Your broker misrepresented investment opportunities, or failed to disclose details about investments
• You filed a complaint with your brokerage firm that has not been resolved
• Your broker is not returning your calls or emails

Some investors have close relationships with their brokers due to the time and trust built over the course of their investment relationship.However, it is crucial to remember that financial decisions should be based on careful analysis and due diligence rather than solely relying on personal relationships.

Engaging the services of an experienced securities attorney to evaluate your specific circ*mstances is strongly advised. At KlaymanToskes, our team of experienced attorneys has a deep understanding of this complex area of law, allowing us to provide invaluable insight and tailored guidance that directly addresses your individual needs.

If you suffered losses with your broker, or have concerns regarding your investment portfolio, contactKlaymanToskesat888-997-9956orfill out a short contact formfor a free and confidential consultation.

Can Your Broker Steal Your Investment Account Funds?

Unfortunately, yes, brokers have been known to steal investor funds.The most common way that brokers have been known for stealing funds using a tactic referred to as a “conversion of funds”. UnderFINRA Rule 2150any broker who takes a client’s securities or funds without written authorization is in violation of FINRA Rules.

This misappropriation of funds is a severe offense and is illegal.

Investors who are victims of fund conversion by their broker may have a case against the brokerage firm that employed the broker. If you are an investor who suffered financial harm as a result of your broker’s actions, contactKlaymanToskesat (888) 997-9956 for a free consultation.

When Should You Speak with an Attorney?

If your investment portfolio has suffered significant losses and/or you suspect misconduct or negligence on the part of your broker,you should speak with an attorney as soon as possible.

Why?

Delaying seeking legal advice can harm your chances of recovering your losses.

We don’t believe in making uninformed decisions. After your trust has been broken, it’s vital more than ever to do your due diligence.

At KlaymanToskes, we believe in giving power back to the investor. It’s your money, and you have the right to do with it as you see fit. That is whywe offer free consultationsto discuss your potential claim andprovide you with the information you need to make informed decisions about your financial future.

Filing a Complaint with a Brokerage Firm vs. Filing a FINRA Arbitration Claim

What we typically see investors do when they run into investment loss issues with their broker, is try to resolve the matter directly with their brokerage firm. This makes sense, as it seems like the most straightforward course of action.

Rarely will this result in a satisfactory resolution. Brokerage firms have a vested interest in minimizing their liability and/or outright denying your complaint. There is a high chance that your complaint will be “noted” in your file, and you will never hear about it again.

Once you have filed a complaint with your brokerage firm, the clock starts ticking on your legal rights.FINRA mandates that any claims against a brokerage firm or broker must be filed within six years from the date of the occurrence.This is known as the “statute of limitations.”

So, what should you do? We believe in leaving no stone unturned.It is recommended to file a complaint with your brokerage firm and simultaneously pursue FINRA arbitration claims.

Why?

You want to give yourself the best shot at recovering your losses.

When Should I Speak with a Securities Attorney?

If you’ve experienced investment losses, suspect broker misconduct or negligence, or have an unresolved complaint with your brokerage firm, you should speak with a securities attorney who has experience handling FINRA arbitration claims.

Ideally you should consult with an attorney before you file a FINRA arbitration claim and/or agree to a settlement with your brokerage firm.The reason for this is simple: once you have taken action, it cannot be undone.

FINRA recommendsthatall investors who are considering filing a claim should seek legal representation from an experienced securities attorney.The FINRA arbitration process is complex and requires a thorough understanding of securities law. Your brokerage firm will have a team of attorneys on their side, and you should too.

ContactKlaymanToskesat888-997-9956orfill out a short contact formfor a free and confidential consultation to discuss your potential claim.