Investor FAQs | FINRA Arbitration Law Firm

Can a firm be held liable even if it didn’t approve the investment?

Yes. If the firm failed to supervise the broker or ignored red flags, it may be responsible.

What should I do if I suspect selling away?

Request documentation showing whether the investment was firm-approved. Then contact a securities attorney at Altamirano PLLC to investigate whether your advisor’s actions violated FINRA Rule 2010.

Is there a time limit to bring a fraud or misrepresentation claim?

Yes. Under FINRA Rule 12206, arbitration claims can be filed within six years from the occurrence or event giving rise to the claim. This six-year eligibility rule is separate from state statutes of limitation, which may impose shorter deadlines. Any disputes about whether a claim is timely are decided by the arbitration panel, not by FINRA staff. Because eligibility questions can be complex, it is critical to act quickly to protect your rights.

What are common red flags of investment fraud?

Red flags include guaranteed or unusually high returns with little or no risk, reluctance to provide written documentation, pressure to act quickly, vague or overly complex explanations, and inconsistencies between verbal representations and written materials. If you encounter any of these, it is important to seek legal advice promptly.

How do I prove fraud or misrepresentation in FINRA arbitration?

To prove fraud, you generally need to show that the broker made a false statement or omitted a material fact, that they knew or should have known it was false, that you relied on it when making an investment decision, and that it caused your loss. Misrepresentation claims may require proving that the information provided was inaccurate or incomplete, even if it wasn’t intentional, and that the misrepresentation caused you financial harm.

Can I recover investment losses if the broker didn’t intend to defraud me?

Yes. While fraud requires intent or reckless disregard for the truth, negligent misrepresentation does not. If you relied on inaccurate information and suffered losses, you may have a valid claim to recover your investment losses even without proving intent.

What is the difference between fraud and misrepresentation?

Fraud generally involves intentional or reckless conduct to deceive, while misrepresentation can include negligent false statements. Both involve providing inaccurate information or omitting material facts, and both can form the basis for recovery in FINRA arbitration.

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Investor Claims

Turning Broker Betrayal Into Broker Accountability

Fraud or Misrepresentation Alternative Investments Unsuitable Investments GWG L Bonds Claims Selling Away

Securities Violations

Robinhood & Self-Directed Investor Claims

Failure to Supervise Breach of Fiduciary Duty Broker Negligence

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