If you believe that you have lost money due to actions by your broker, there are several ways you can seek compensation for your losses. One way is to have a hearing from the Financial Industry National Regulatory Authority (FINRA). They are a non-profit organization that is supervised by the Securities and Exchange Commission (SEC). They exist as a watchdog group to monitor brokers all over the country. They can hear your complaint and offer arbitration services to resolve the issue. Although an attorney is not required, you are better off hiring a securities' law attorney with experience with FINRA hearings. The following are a few reasons why this is true.
They can analyze the strength of your case
Your chances of recovering any money may not be as strong as you believe it is. If this is true, you can find out without spending your time and money. Most attorneys will offer a free consultation. On the other hand, the circumstances may be more serious than an arbitration hearing is suitable for. In this case, an alternative approach can be explored. But if your case is ideal for arbitration, an attorney can explain why this is true and the various possible outcomes for your case.
They will speak to your brokerage firm
When you first opened your investment account, you most likely signed a document that contained a paragraph where you agreed to arbitration when a dispute arose over such things as losses on your investments. However, just because you agreed to mandatory arbitration doesn't mean that the brokerage firm wants to take it to that level. Sometimes a negotiated settlement can be agreed to without a third party getting involved. An attorney with experience will understand what the likely outcome of arbitration will be. The attorneys for the brokerage firm will also have an idea. Just as in other areas of litigation, out of court settlements are not uncommon.
They can prepare your case
Not only will they do the talking for you in an arbitration hearing, but they will present your case. Fundamentally, this is not any different than other types of court cases. Evidence will be presented and witnesses can be heard. For this reason, you will need to work with your attorney to obtain all of the documents necessary to demonstrate that your losses were due to negligence on the part of your broker. A strategy will be formulated, and your attorney will explain exactly how negligence will be demonstrated to the arbitrators.
Of course, the attorney or attorneys for the brokerage firm will be defending their employers from the accusations made against them. The final decision that is made is not necessarily for or against you. There are often solutions that result in a partial win for you. However, keep in mind that your chances of receiving compensation for your investment losses are much greater with a securities attorney.
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