Securities Claims Management, LLC
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Frequently Asked Questions

What are typical claims against investment advisers and stock brokers?
There are numerous reasons for an account to lose value.  Many losses are simply caused by the fluctuations of a volatile market and cannot be blamed on your broker/adviser.  However, the following are some of the most common claims that warrant action against your broker/adviser:
        · Unsuitable investment recommendations
        · Misrepresentations
        · Omissions
        · Unauthorized trading
        · Failure to execute an order
        · Churning (excessive trading)
        · Excessive use of margin
        · Breach of fiduciary duty
        · Breach of contract
        · Negligence

If you believe you have been the victim of any of these actions, contact SCM immediately for a free consultation and evaluation of your complaint.

If I choose to sue my broker or adviser, will SCM represent me in the litigation?
CM does not provide legal counsel.  However, over the years, SCM has worked with some of the very best securities attorneys and litigators in the country.  From these relationships and connections, SCM will refer you to an appropriate attorney whose strengths best match your case facts and any special needs.

What is Binding Arbitration?
Due to contractual agreements with the brokerage firms, the vast majority of customer complaints against brokers are resolved through a dispute resolution process called "binding arbitration."  In binding arbitration, unlike traditional litigation, the customer's claims are heard and decided by a panel of "arbitrators" under the auspices of an organization which administers arbitration proceedings, such as the Financial Industry Regulatory Authority - FINRA (formerly known as the National Association of Securities Dealers). There is no judge or jury; there is relatively little "pretrial" procedure; the legal rules of evidence and procedure are not strictly applied; the arbitrators are not bound by any body of legal precedent; and, with rare exception, the decision of the arbitrators is final and not subject to a meaningful appeal. For these reasons, knowledge and experience with these specialized circumstances is critical to the success of the claim.

Who will serve as the arbitrators?
Although it is dependent on the size of your claim, in most cases, the arbitration panel is made up of three individuals. One is generally an “industry insider” who has a professional background within the securities business. The other two are “public arbitrators.” Although they generally have an understanding of the securities business, “public arbitrators” have not worked in the securities business before. At least one of the public arbitrators is a lawyer. Of the three members of the panel, a chairman is selected. More often than not, the chairman is an attorney. A principle duty of the chair is to make legal determinations throughout the proceeding.

Where will the arbitration take place?
Pursuant to FINRA’s Code of Arbitration Procedure, the location of the arbitration is generally determined by the customer's state of residence when the dispute arose.

What will suing my stock broker cost me?
Most securities lawyers represent their clients on a contingent fee basis.  This fee is an agreed upon percentage of the money recovered on behalf of the client.  Most security lawyers charge approximately 33%.

Although clients do not pay a fee if nothing is recovered, no case is without financial risk.  Expenses associated with every case are ultimately the responsibility of the client.  Expenses in a standard case include but are not limited to: filing fees, forum fees, travel, copying charges, long distance telephone charges, mailing and delivery, travel and lodging

What are the odds of winning?
It is impossible to predict the outcome of any case. However, for a detailed tally of national case statistics, please visit FINRA's website (click here).

My stock broker left the brokerage firm where my account is. Does this mean I can no longer sue that brokerage firm?
No. The broker was acting as an agent of the brokerage firm he was working for at the time the troubles started. Even if the broker has since moved, the brokerage firm is still responsible for his actions while an employee at the time of controversy.

Is there a chance that my case may settle?
Yes. According to the statistics of all cases filed with the FINRA, approximately 50%-60% of cases filed settle prior to the final arbitration hearing. However, many issues factor into the potential of settlement which makes predicting whether a case will settle or not impossible.

How long will the process take?
FINRA states the arbitration process takes, on average, 12 months. Our experience has proven that there are a multitude of factors that can affect the total time it takes to resolve a case.  SCM’s case management skills help attorneys keep a case on track and resolved as quickly as possible.

Does my attorney need to be licensed in the state I live in?
No.  FINRA Arbitration Procedures only requires that an attorney who represents you be in good standing and admitted to practice before the Supreme Court of the United States or the highest court of any state in the United States (unless state law prohibits such representation).

I don’t live in Virginia; can SCM still review my complaint?
Yes. In fact, many investors who contact SCM do not live in Virginia or even on the east coast.  A great deal of the work can be done over the phone, electronically, and through the mail system.  SCM has worked with some of the very best securities litigators all over the country.  If your complaint merits a claim and legal representation, SCM can refer you to an appropriate attorney whose strengths best match your case facts and any special needs.

Will my stock broker be fired because I file a claim?
It is impossible to know. However, we do know that a complaint filed against a stock broker is reported on his/her permanent and public employment record.

Will I have to turn over my financial records?
Yes.  Although the discovery process of a FINRA arbitration is limited, it has been determined that in all cases, customers will have to produce certain financial documents beyond those directly associated with the account in question.  Contact SCM for a list of the types of documents that are required to be produced.

CONTACT Securities Claims Management if you have any additional questions or wish to have a FREE consultation and evaluation of your complaint.

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