Securities Arbitration

We all know people that have lost money in the stock market. Sometimes those losses are the result of an unbalanced portfolio, market volatility or just a bad decision. Other times, however, portfolio losses are the results of improper conduct by the broker with whom monies were entrusted. Sometimes a broker simply invests a client’s money in securities that are not suitable given that client’s background and investment objectives. Or, a broker trades in and out of securities to generate commissions and not because it is best for that broker’s client. There are times when a broker simply does what he or she wants, misleading a client or ignoring the stated objectives of a client. Finally, there are brokers who simply pocket the proceeds of a trade, proceeds which belong to a client. In almost all scenarios, any redress sought by the injured investor will come not through a lawsuit but by commencing a securities arbitration before either the New York Stock Exchange or the National Association of Securities Dealers, commonly referred to as the NASD. In addition, the brokerage firm may be responsible for the wrongdoing of the broker and may be liable to the broker’s client. While an arbitration proceeding is designed to speed and simplify the process, that is not always the case. Legal counsel is important to review the facts and advise a course of action. If an arbitration should be commenced, it is a good idea to retain a lawyer.