Category: FINRA Arbitration

FINRA Elder-Abuse Rule to Take Effect Next Month

A new FINRA regulation taking effect on February 5, 2018 is designed to prevent financial exploitation of seniors and will result in what could be challenging conversations between brokers and older clients.  The rule requires that brokers make a reasonable effort to identify a trusted person who can be contacted if the broker is concerned that the client is suffering from diminished mental capacity or is the target of a scam. The request for a trusted contact must be made at account openings for new clients and during account updates with existing clients. The regulation also provides brokers with liability protection if they place a hold on disbursements from an account because they think their clients could be harmed.


Hanley law represents individual investors nationwide with significant losses in their portfolios, retirement plans or investment accounts.  The firm is dedicated to assisting investors to recover losses suffered by unsuitability, over-concentration, fraud, misrepresentation, self-dealing, unauthorized trades or other wrongful acts, whether intentional or negligent.  The firm handles cases against the major Wall Street broker dealers.

Let Hanley Law work for you. Call (239) 649-0050 or contact the firm through our Website to arrange a free confidential consultation with an attorney to discuss your experiences with your stock broker which resulted in investment losses.

FINRA Lawyers can help protect investments

When someone has made financial investments in the form of securities, it is possible that their investments won’t result in the profit they anticipate. This can happen for a number of reasons, including changes in the industry you’ve invested in, but it can also be the result of broker misconduct. If you feel that your investments failed as the result of actions made by your broker, it’s important to find reliable a FINRA lawyer to help you with your case. There may have been misconduct on the part of your broker or brokerage firm which caused your investments to fail, and it’s important to explore all of these possibilities when determining the cause of your financial losses. FINRA is the regulatory organization which oversees the financial industry, including securities investments. A security is an investment which is made by individuals or businesses with the anticipation of a return in profit. Because these types of investments can be a good way to ensure a comfortable future for yourself and your family, investing has become a more common practice. FINRA exists to protect the market’s integrity and provide investors quick and effective regulation should they run into trouble. FINRA isn’t part of the government, but are authorized by congress to protect American investors in Florida and nationwide. Of course every investor assumes they are trading in a fair financial market, and FINRA’s regulatory efforts make this true the majority of the time.

However, there are predatory practices employed by brokers which can lead to losses on your end. If you find yourself in this situation, it’s likely that you have already agreed to solve any disputes through arbitration. When entering into arbitration for financial disputes there are many guidelines and procedures which have strict deadlines and must be followed accordingly. Failure to properly fill out paperwork, provide documentation, respond to motions, etc. can all invalidate your claim, resulting in potentially huge losses on your end. A qualified FINRA lawyer in Florida will help you navigate the many facets of securities arbitration and make sure that your claim is not only handled according to all of FINRA’s procedures, but handled in a way which ensures the best possible outcome for investors.

The Hanley Law are experienced FINRA lawyers who help investors in Naples, Fort Myers, Sarasota, Tampa, greater Florida and nationwide settle their FINRA related disputes or arbitration. To have your case evaluated for free by experienced FINRA lawyers, contact The Hanley Law.

What is Securities Arbitration?

Securities Arbitration is the process, which takes place following a dispute with a broker or dealer. Prior to arbitration, the investor has determined that the broker engaged in some form of wrongdoing, or otherwise negligent action that resulted in a loss. Depending on the amount of the claim, the investor may or may not have to appear before an arbitrator or group of arbitrators. Arbitration is an alternative to settling in court and is often the preferred method of dispute resolution because it is typically faster and less expensive.

While typically a contract between a firm and investor is what provides ground for arbitration, the absence of a contractual agreement does not mean that the dispute cannot be settled through arbitration. If the broker or firm is registered with the Financial Industry Regulatory Authority, they are bound to FINRAs procedural guidelines, which include the duty to participate in arbitration when a conflict arises.

Arbitration is NOT an investor complaint. If you want to make FINRA aware of any suspicious activity then you should file an investor complaint. Arbitration is similar to a court case, with formal proceedings but for the reasons stated above is a simpler and quicker alternative to litigation. If a claim is under $50,000 then the dispute can be settled through what is known as “Simplified Arbitration”. In this scenario, parties provide case materials, which are reviewed by an arbitrator; this does not require parties to appear in person. For cases involving larger sums, arbitration takes place in-person and is reviewed by a panel of up to 3 arbitrators.

To initiate an arbitration, the investor must submit what is known as a “Statement of Claim”. The statement of claim must be articulate and while there is no standardized format, following the format of a suit in court is effective. The statement of claim should include all the pertinent information that the arbitrator(s) need to make an intelligent decision. This included the nature of the dispute, any background information, dates, types of securities at hand, names of the parties involved, the kind of transactions that took place and the damages sought.

Following the statement of claim, the respondents must answer to the allegations. This must also be detailed and simple denial will not suffice. At this point in time the respondent can file a counter-claim against the investor or a 3rd party involved. Once the submission of facts from either side is received by FINRA, a hearing location is chosen. Before the hearing is a discover period, where documentation is provided and exchanged amongst parties involved and FINRA officials. This stage is a window of opportunity for the assertive attorney as it is the opportunity to obtain any and all relevant information from the other party prior to the hearing. Often, the persistence of a dedicated attorney during the prehearing discovery phase can result in a favorable verdict for their client.

The hearing itself is scheduled in advance and follows a similar format to a case in court. Witnesses are interviewed, cross-examined and evidence is produced. A series of questions are asked and there are multiple stages before the process is concluded. The arbitrators will determine what awards are served usually within 30 days of the last hearing. The award will include the basic facts of the dispute but does not have to provide justification or rationale behind the actual dollar amount awarded. The opportunity to appeal a decision exists on the state and federal level but it is rarely ever successful.

The Hanley Law is a Naples, Florida based firm who have an extensive track record of successfully securing awards for their clients. The arbitration process is complex and difficult to navigate without the guidance and advocacy that skilled attorneys can provide. Hanley Law offers a free case evaluation to determine the best course of action for you.

Florida FINRA Litigation

FINRA is the financial institution which regulates securities and the financial market. FINRA attorneys focus their practice on niche areas of FINRA law, whether they are defending brokers against regulatory inquiries, working on arbitration claims involving both investors & brokers, or defending investors against predatory broker practices. Most, if not every, brokerage firm requires potential investors to agree to resolve any disputes through FINRA arbitration. This is usually outlined in the opening documents, and states specifically that any issues will be settled through FINRA dispute resolution. Legal professionals with experience representing both investors & brokers before FINRA arbitrators should be familiar with all procedures, the forum & arbitrators. With their experience and knowledge, the first step to take if you have an issue with an investment should be to contact an accomplished FINRA attorney. They know how to properly prosecute cases on the behalf of both brokers and investors.

If you are an investor, they are many ways that you might feel you’ve been wronged by a broker or financial institution. You might believe that an investment made was unsuitable to your investment portfolio, or that an investment was made based on misleading or even fraudulent statements made by your broker. You might feel that your portfolio was over-concentrated in one industry or area, which resulted in your investments not being profitable or worthwhile. Even more concerning, you might feel your account was subjected to unauthorized trading, or churning (excessive trading to increase broker commissions). However you might feel that your investments have been mishandled, it’s important to consult with an attorney experienced in FINRA litigation to evaluate your case and determine any legal discourse necessary.

Most investment issues are resolved through securities arbitration, and as stated earlier, many brokers outline this requirement in their opening documents. Securities arbitration has become the most popular means of resolving broker-dealer conflicts in Florida and nationwide, largely due to a Supreme Court decision in 1987, and has long been used as it provides a quick and inexpensive alternative to arbitrating through the courts. After beginning the arbitration process, there are many different factors which need to be determined and decided upon by all involved parties, including arbitrator panel composition, hearing locations, and other details related to the arbitration process. While cases typically take between 1 year and 14 months to resolve, the process can be delayed or expedited depending on the complexity of the issue or the discovery timeline.

In Orlando and Florida, there are strict deadlines and regulations related to securities arbitration that can elude an inexperienced individual. If you are concerned about your investments it’s important to consult an experienced attorney who understands all FINRA litigation and arbitration requirements as they relate to Florida. Contact the Hanley Law to have your case evaluated for free and determine the legal validity and potential outcomes of your unique situation.

FINRA Arbitration Orlando, Florida

FINRA stands for the Financial Industry Regulatory Authority. It is an organization that oversees the securities industry. The organizations primary function is to protect investors and does so by subjecting traders to a set of rules and regulations. Enforcing rules and subjecting violators to punishment is what takes place after the detection of any wrongdoing. Educating the public is a primary function as well, as the best way to reduce the impact disputes have, is to avoid them altogether. Being that we live in an imperfect world and trade in an imperfect marketplace, disputes are inevitable. Once a dispute ensues, FINRA’s forum handles the overwhelming majority of arbitration’s and mediation’s with locations in all 50 states as well as in the United Kingdom and Puerto Rico.

Since practically all disputes in this industry pass through the hands of FINRA, it is important to retain an attorney that is knowledgeable, experienced and tested when it comes to FINRA regulations, procedural nuances and formal hearings. While resolving a security complaint doesn’t necessarilly require you to have an attorney, if you are seeking a beneficial outcome, it is in your best interest. Brokerage firms will be represented by an attorney which is why you need to come represented as well. The attorneys that that defend brokerage firms are savvy and you’ll need a fierce advocate to represent your best interests.

Depending on the circumstances, a dispute will either result in Arbitration or Mediation. The former closely parallels a trial that would take place in a United States court. The state of Florida has specific narrowly tailored guidelines for arbitration that change the landscape of the field. In other states, individuals with no license to practice law can provide advice to disputant investors for a fee. Arrangements of this nature are banned in Florida. In addition to this, arbitrators can include reasonable attorneys fees as part of the settlement for the receiving party. Before any type of settlement is awarded, the facts are reviewed. The process requires an initiation (commencement) , a statement of claim, examination of witnesses and presentation of evidence.

The Hanley Law is a South Florida based firm with the FINRA experience and insight needed to successfully secure a settlement on your behalf. The firms history with the security industry precedes the creation of FINRA. Whether your investments were poorly handled or you were the victim of stock fraud, Hanley Law offers a free case evaluation to determine the best course of action for you.

How to Recover Damages Through Securities Arbitration

Florida Securities Arbitration Attorneys at Hanley Law, PLLC

If you have investments with a financial corporation or brokerage firm, it’s important to monitor your investments to ensure they are being handled according to your agreement with the broker. If you suspect that some fraudulent activity might be going on, including any activity you didn’t consent to, you might want to consider resolving the issue through arbitration. Arbitration is how the majority of disputes in the securities industry are resolved (as opposed to a traditional courtroom trial) because it is a quick and inexpensive way to solve complicated concerns.

The process will typically take anywhere between 12-14 months from the time the claim was filed, but the timeframe will vary depending on certain factors (# of involved parties, complexity of issues, personal schedules, volume of necessary discovery) and can be expedited in special circumstances (due to medical concerns or age). The first step is to file a Statement of Claim with FINRA. This will include the details of the dispute, including identifying the Claimant (who filed the claim) and Respondent (who the claim is against), and the type of damages requested. The Claimant must also file an Arbitration Submission Agreement and pay a filing fee, which depends on the amount of the claim, number of discovery motions, number of hearing sessions and any postponements. Next the claim gets served to the respondent(s), who then file an “answer” which specifies any relevant facts and outlines their defense.

After the answer is received, the arbitrator selection process begins. The Claimant and Respondent are provided lists of arbitrators (generated from FINRA’s Neutral List Selection System) and get the opportunity to evaluate their potential arbitrators and eliminate those they don’t want on their case. Depending on the dollar amount of the damages requested and parties involved, 1-3 arbitrators may be assigned. Next, you will have a prehearing conference with all parties involved including the appointed arbitrators to determine the timelines for discovery, briefing & motions, and evidentiary hearing dates.

After all discovery and any motions have been filed it is time for the actual hearing, which is similar to a normal trial where the Claimant will try and prove their claim and the Respondent will try to defend their position. The hearing will typically include testimony from involved parties and any witnesses, and reviewing any evidentiary documents. After the hearing arbitrators will then deliberate and render their decision of award, which is issued within 30 days. There is no appeals process offered through FINRA, but district courts do have the power to overturn an arbitration award under certain circumstances. Brokerage firms & brokers then have 30 days to pay you, or they risk suspension by FINRA.

This is a highly simplified version of the securities arbitration process, intended to give a general overview of how to collect damages through arbitration. To learn more or to have your case evaluated for free by legal experts, please contact The Hanley Law.

Common Sales Pitches Used in Investment Scams

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which describes common sales pitches used in investment scams.

Investment fraudsters make their living by making sure the investments they pitch sound good and true. Additionally, fraudsters tailor their pitches to the investor by first gaining background information on the investor and using that information to lure them in. FINRA has identified the following five (5) most common sales pitch tactics:

  1. Phantom Riches Tactic: Entice investors with promises of wealth.
    2. Source Credibility Tactic: Build credibility with claims of having expertise, experience and being from a reputable firm.
    3. Social Consensus Tactic: Lead investors to believe that other savvy investors have already invested.
    4. Reciprocity Tactic: Offer to do a small favor for investor in return for the investor doing a large favor.
    5. Scarcity Tactic: Create a false sense of urgency by claiming limited supply of product.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.

FINRA Issues New Investor Alert, Avoiding Investment Scams

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which describes common types of tactics employed by fraudsters to solicit investors. FINRA advises of the following seven (7) red flags investors should look out for:

  1. Guarantees: Be wary of anyone who predicts how investments will perform.
    2. Unregistered Products: Many investments scams involve unlicensed individuals selling unregistered products.
    3. Overly Consistent Returns: Investments that provide steady returns regardless of current market conditions.
    4. Complex Strategies: Avoid anyone who cannot clearly explain their investment technique.
    5. Missing Documentation: A stock should have a prospectus or offering circular, if not the product may be unregistered.
    6. Account Discrepancies: Unauthorized trades, missing funds or other problems with your account statements could indicate churning or fraud.
    7. Pushy Salesperson: No reputable investment professional should push you to make an immediate decision about an investment.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.

Identifying Risk Factors that Make Investors Susceptible to Fraud

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Avoiding Investment Scams which described risk factors that make investors susceptible to investment fraud and provides tips to avoid being scammed.

FINRA has identified the 5 following risk factors for investors falling prey to fraudsters:

  1. Owning high-risk investments.
    2. Relying on friends, family, co-workers for advice.
    3. Being open to new investment information.
    4. Failing to check the background of an investment or investment professional.
    5. Inability to spot persuasion tactics used by fraudsters.

FINRA urges investors to ask questions about investments and investment professionals by doing the following:

  1. Perform a Background Search on the Investment Professional: Ask if the investment professional is licensed to sell you the investment and confirm which regulator issued their license. Additionally, ask if and when their license has ever been revoked or suspended. A legitimate securities salesperson must be properly licensed, and his or her firm must be registered with FINRA, the SEC or a state securities regulator—depending on the type of business the firm conducts. An insurance agent must be licensed by the state insurance commissioner where he or she does business. To verify the investment professional’s response use FINRA BrockerCheck, contact National Association of Insurance Commissioners or contact North American Securities Administrators Association.
  2. Check Out Investments: Ask whether the investment is registered and, if so, with which regulator. Usually companies register their securities before they can sell shares to the public. You can find out whether a product is registered with the SEC by using the EDGAR database. Additionally, you can also use FINRA’s ScamMeter to determine whether an investment might be a scam.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.

FINRA Issues New Investor Alert, Should You Exchange Your Variable Annuity

The Financial Industry Regulatory Authority (FINRA) issued a new Investor Alert called Should You Exchange Your Variable Annuity. The article explains what a variable annuity is, reasons investors should or should not make a section 1035 exchange, what investors should look out for and what regulators do to protect investors.

An annuity is a contract between an investor and an insurance company. The investor buys the annuity and the company promises to make periodic payments to the investor. There are three types of annuities, fixed, variable and equity-indexed. Fixed annuities are guaranteed a payout, variable annuities payouts depend on the investments chosen and equity-indexed annuities payouts vary, but typically not as much as a variable annuity.

Variable annuities are securities registered with the Securities and Exchange Commission (SEC) and their sales are regulated by the SEC and FINRA. These annuities may impose numerous fees when you invest in them, including surrender charges, mortality and expense risk charges, administrative fees, underlying fund expenses and charges for special features.

An investor might choose to make a Section 1035 Exchange because of new developments in annuity features, including an increase in investment options, less expensive variable annuity contracts, and enhancement of death and living benefits.

However, Section 1035 Exchanges are not always a good idea for investors. FINRA listed the following reasons why investors should not take part in the exchanges:

1) The credits offered are usually offset by the insurance company adding other charges.

2) Contract provisions, such as surrender charges, expire with an existing contract. New charges could be imposed with a new contract or may increase the period of time for which the surrender charge applies.

3) There could be higher charges, like annual fees for the contract.

4) The costly features might not benefit the investor.

5) The broker usually gets paid a higher commission for a variable annuity, compared to the sale of a stock, bond or mutual fund.

Prior to making a Section 1035 Exchange an investor should learn all the facts to determine if the exchange will benefit them. An investor should only exchange their investment when it benefits the investor, not just the financial advisor.

Financial Advisors and Insurance Agents must provide all information to the investor. The advisor or agent should offer the exchange only if it is determined that it could benefit the investor after conducting a review of the investor’s personal and financial situation and needs, tolerance for risk and financial ability to pay for the contract. This suitability obligation is based on FINRA Rules.

Several states and brokerage firms require forms to reflect customer acknowledgement of a replacement transaction. Such forms should provide a comparison of features and costs of an existing contract to the proposed contract and detail what is needed to make the exchange.

FINRA and the SEC have conducted special sales practice examinations that focus on the sales of variable contracts, annuities and life insurance products. The results indicated that some advisors and agents recommended unsuitable products for their customers and the firms did not properly supervise their employees to prevent the unsuitable recommendations.

Furthermore, FINRA points out that unsuitable sales of variable contracts are routinely investigated. Therefore, it is important for the investor to do research and protect their assets.

If you and have suffered investment losses, please contact the Hanley Law to explore your legal options. The Hanley Law is dedicated to helping investors who have been victims of securities fraud. If you have lost money as a result of securities fraud, you may be able to recover your financial losses. Contact us today toll free at (239) 649-0050 for a free initial consultation.