Portfolio Losses Abound for Americans
The rate of financial losses for people who did their planning right for their retirement is both astonishing and frustrating. Portfolios are rapidly shrinking for individuals who are already retired or who thought they would be on the brink of retirement by now.
At what point can a client actually file a claim on their broker for misrepresenting a financial product or doing illegal or unethical trades with their funds? If your losses are strictly from the general downturn of the market, you will not be able to file a claim. It is not a basis for legal action if you are just upset about the shrinking of your portfolio. You have to show illegal misconduct on the part of the broker.
An example of poor investing strategy would be a couple on a fixed income being put into a high risk financial product for their investment needs. In this situation, you may be able to file a claim. Certain other practices by brokers are also valid reasons to file a claim. A practice called churning is done by unethical brokers where they trade financial products excessively to bolster their commissions.
Another inappropriate financial move on the part of the broker would be unauthorized trading and that woulld be grounds for a claim. Unauthorized trading is trading in the market without the client’s knowledge or consent. Another basis for filing a claim is a misrepresentation of the nature of an investment. In this situation, the broker would give the client either false information or not present the complete facts about a given investment.
Another example of misconduct on the part of the broker is cold calling which is unsolicited phone calls coupled together with high pressure and heavily persistent measures. If you feel you have been the victim of misconduct on the part of a broker, you can start by hiring an attorney and file a claim with the FINRA. Include all names, dates and account numbers on your form but be concise. For your compensation interests, it is better to name a firm rather than an individual broker.
It is expensive to start and keep the legal process going. In security arbitration, it is usually done on a contingency basis and the lawyers usually get up to 30% of the award.
Filing fees range from $50.00 to $1800.00 and there is a hearing fee of $50.00 to $1200.00. One option, if you can’t afford this, is to look for pro bono legal services featured at select law schools.
You want to be certain that you have a case and a valid reason for pursuing legal action before starting this process.
