Stockbroker & Investment Fraud Lawyers

Stockbroker and Investment Fraud Lawyers in the United States

Every year, investors across the country lose billions of dollars to fraudulent schemes, unauthorized trading, and misleading investment advice. According to FINRA, over 3,000 investor complaints are filed annually through its dispute resolution program alone. A stockbroker and investment fraud lawyer fights to recover those losses and hold bad actors accountable.

What Stockbroker and Investment Fraud Law Covers

Investment fraud takes many forms. It includes Ponzi schemes, churning (excessive trading to generate commissions), unauthorized transactions, and the sale of unsuitable investments. Brokers and financial advisors owe their clients a fiduciary duty or suitability obligation, and violating that standard is grounds for a claim.

This area also covers securities fraud, misrepresentation of investment risks, failure to disclose conflicts of interest, and elder financial abuse. Cases can involve individual brokers, brokerage firms, or registered investment advisors. Claims are often pursued through FINRA arbitration rather than traditional court litigation.

When to Hire a Stockbroker or Investment Fraud Lawyer

• Your brokerage account shows unexplained losses or trades you never authorized
• A financial advisor recommended investments that were clearly unsuitable for your risk tolerance or financial goals
• You suspect your broker is churning your account to generate excessive commissions
• You were misled about the risks, fees, or nature of an investment product
• A loved one, particularly an elderly family member, appears to be a victim of financial exploitation by an advisor

How the Process Works

Most investment fraud cases begin with a review of account statements, trade confirmations, and advisor communications. Your lawyer will identify specific violations of securities laws or FINRA rules. A demand letter may be sent to the brokerage firm before formal proceedings begin.

The majority of these disputes are resolved through FINRA arbitration, a streamlined process that typically takes 12 to 16 months from filing to hearing. A panel of arbitrators hears evidence from both sides and issues a binding decision. About 42% of FINRA arbitration cases that go to hearing result in an award for the investor.

How Compensation Is Calculated

• Net out-of-pocket losses — the difference between what you invested and what you received back, including any partial returns
• Well-managed account damages — what your portfolio would have earned if properly managed, compared to actual performance
• Consequential damages — tax liabilities, margin interest, or other financial harm caused by the fraud
• Disgorgement of commissions and fees the broker earned through wrongful conduct
• In some cases, punitive damages for particularly reckless or intentional misconduct

Frequently Asked Questions

Is there a time limit for filing an investment fraud claim?

FINRA arbitration claims must generally be filed within six years of the event giving rise to the dispute. State securities laws may impose shorter statutes of limitations, sometimes as brief as two years. Acting quickly preserves your ability to recover losses and ensures key evidence remains available.

Can I still recover money if my brokerage firm has closed?

Yes, in many cases. FINRA arbitration claims can be brought against individual brokers even after a firm shuts down. If the broker maintains active registrations or has assets, recovery is still possible. The Securities Investor Protection Corporation (SIPC) may also provide limited coverage if a firm becomes insolvent.