Exceptional and accessible legal representation across Kentucky and Nationwide

Exceptional and accessible legal representation across Kentucky and Nationwide


What happens if my securities fraud claim is never paid?

On Behalf of | Sep 12, 2018 | Securities Law And Litigation |

Can you imagine suffering from investment fraud, going through the motions to pursue a successful securities arbitration claim against the brokerage firm that defrauded you and then never getting paid after receiving a favorable arbitration award?

Unfortunately, this situation happens from time to time, leaving defrauded investors in a lurch, but a new Senate bill could protect harmed investors from this outcome. The Financial Industry Regulatory Authority (FINRA) may soon be required to set up a fund that will pay securities fraud arbitration claimants their unpaid arbitration award money.

From 2012 to 2016, defrauded investors who received favorable FINRA arbitration award rulings did not get paid approximately $200 million in awarded compensation. This surprising statistic is particularly distressing considering the financial devastation experienced by the victims of investment fraud.

Still, the proposed “FINRA Relief Fund” Senate measure has received mixed reviews: Not everyone is supporting the idea. The U.S. Chamber of Commerce Center for Capital Markets Competitiveness Executive Vice President Tom Quaadman, for example, claimed that the bill would result in more problems than benefit. The VP believes that “the legislation would empower bad actors by ensuring them there is a backstop in place – paid for by somebody else – to compensate investors they have cheated.”

Supporters, however, take a different position. AFL-CIO Policy Director Damon Silvers says that the bill is important to “improve the integrity of securities laws.”

If you have received a favorable FINRA arbitration award pertaining to stock fraud, securities negligence or investment fraud — but you were not paid — you may want to investigate your legal rights and options to enforce your FINRA arbitration award ruling.

FindLaw Network