DO YOU HAVE A CLAIM AGAINST YOUR BROKER?

The vast majority of stock brokers in the United States are professionals who perform a valuable service on behalf of their customers. The fact that an investor loses money on an investment does not, by itself, make a broker liable.

However, in their dealings with customers, brokers have a number of duties that they owe their customers, including: 

• The duty of loyalty
• The duty of fair dealing 
• The duty to “Know the Customer” and to act in their interest

If the broker fails to live up to these duties and this failure causes loss to a customer, then the broker can be liable. Additionally the brokerage firm may be held liable for the actions of their brokers and for the firm’s failure to properly supervise them.

The facts of every case are different and therefore, we offer a FREE, NO OBLIGATION case review to all of our potential clients.


WHAT ARE THE MOST COMMON CLAIMS AGAINST BROKERS?

The most common claims made against brokers are unsuitable trading, unauthorized trading and excessive trading.

UNSUITABLE TRADING occurs when a broker recommends investments that are not appropriate for a client based upon the clients’ financial situation and investment objectives. For example, when a customer tells the broker he wants only safe investments for a retirement account and the broker ignores this information and recommends high risk purchases, the recommendation is unsuitable and the broker may be liable.

UNAUTHORIZED TRADING is where a broker merely makes a trade on behalf of a customer without the knowledge or consent of the customer. No broker has the right to perform such an act unless the customer has previously signed a written agreement authorizing the broker to act on his or her behalf.

EXCESSIVE TRADING (or churning) occurs when a broker engages in a course of trading that is not based upon acting in the customer’s best interest but rather is designed to generate commissions and fees for the broker and his firm. For example, short term trading in mutual funds has been said by the SEC to raise a red flag as to whether churning has occurred since these investments are generally not appropriate for short term trading. Such trading raises a question as to whether churning has occurred, resulting in liability for the broker and their firm.


HOW DOES ONE PURSUE A CLAIM AGAINST A BROKER?

At the time you opened your account, likely unbeknownst to you, you signed an agreement providing that any claim you may have against your broker would be decided in arbitration, rather than through state or federal court. Therefore, with very few exceptions, to pursue a claim you must go through arbitration

Most securities cases are filed through the National Association of Securities Dealers, the New York Stock Exchange and the American Arbitration Association.

The cases begin with the filing of a Statement of Claim, proceed through exchange of information between the customer and the broker and firm, and eventually, if not settled, through an arbitration hearing.

Arbitration hearings are conducted by a three-person panel, one of whom is affiliated with the securities industry. The hearings are semi-informal and take place in a conference room in a large city near the customer’s home.


DO I NEED HELP IN PURSUING A CLAIM?

The vast majority of customers who file claims in arbitration are represented by attorneys.

An attorney can help guide you through the process, knowing what, where and when to file, what claims should be made, how to negotiate any potential settlement, how to evaluate settlement proposals made and ultimately, how to present your case in an arbitration hearing.

A knowledgable attorney will also know what experts to hire to help with your case. Expert testimony is necessary on many cases, since although your attorney may be very knowledgable in the securities field, he or she cannot testify at your hearing.

An expert can assist the arbitrators by outlining how the broker and firm breached the duties owed to the customer and calculating the amount of damages suffered.


WHY SHOULD I HIRE RUNNING, WISE & FORD, PLC
TO ASSIST ME WITH MY CLAIM?
Allen Telgenhof is the lead securities attorney at Running, Wise & Ford. Allen has been assisting clients with claims against brokers since 1990.

He has never lost a case in arbitration and has obtained awards and settlements for his clients totaling millions of dollars. He is an effective advocate, largely because with his experience, he knows what works and what doesn’t work with arbitration panels.

Allen has gained this knowledge not only through his work representing customers but also sitting on the other side—as an arbitrator. Allen is an arbitrator for the NASD and the NYSE and has chaired panels, rendering decisions on claims made by other customers.

From this unique viewpoint, Allen knows how to present a compelling case. Through his contacts in the securities industry, he also is able to use effective experts, a key to any case.


HOW MUCH WILL I HAVE TO PAY
RUNNING, WISE & FORD TO REPRESENT ME?

The vast majority of Running, Wise & Ford securities clients hire the firm on a contingent fee basis. This means that the firm is paid an attorney fee only if the claim is successful.

The client is responsible for out-of-pocket costs on the case such as filing fees and expert witness fees, but the attorney fee is paid only from a settlement or award.


WHAT ARE THE CHANCES I WILL WIN MY CASE?

Every case is different and no competent lawyer would ever guarantee a “win” for a client. Running, Wise & Ford’s attorneys have achieved remarkable results for clients in large part because of the extensive screening process we do in evaluating a case.

Simply put, we will only pursue meritorious claims. We do not believe it benefits a customer to spend money pursuing a claim with little chance of success. If we do not believe you have a case, we will tell you up front. No cost, no fee, no obligation.

Overall, the Securities Arbitration Commentator, an industry publication, performed a study and found that 80% of all customer cases settle in favor of the investor prior to the rendering of an arbitration award. Over half of the remaining cases results in an award to the customer.

All cases are different, however, and Running, Wise & Ford cannot provide assurance that there will be a recovery in any case.


HOW DO I GET MY NO COST, NO OBLIGATION CASE REVIEW?

Contact Allen Telgenhof at (800) 968-8577 or (231) 547-8990 or art@runningwise.com. Allen will let you know what information is needed for the review. If you are close to Charlevoix or Traverse City, Michigan, Allen will meet with you personally. If not, most cases can be evaluated through telephone discussions and document review.

If you believe you may have a claim, you should act quickly as statutes of limitation and arbitration eligibility rules are running. If you wait too long, it may be too late for you to pursue your claim.