Yes. Specifically, if your advisor was licensed through the Financial Industry Regulatory Authority (FINRA), you can file an arbitration claim to get some or all of your money back. Whether your claim will succeed depends on exactly what happened.
All investments carry risk. In most types of investment, the biggest risk is that you will lose your investment. It is not necessarily your broker or financial advisor’s fault that you lost money.
In some cases, however, your advisor or broker may have broken the rules. If you think they did, you should immediately contact an experienced securities lawyer. The issues involved in a securities arbitration claim can be complex.
7 examples of legitimate claims against financial advisors
- Making unsuitable investments
- Excessive trading (also called “churning”)
- Making unauthorized transactions
- Making material misrepresentations or omissions/failing to disclose risks
- Breach of fiduciary duty (such as conflicts of interest)
- Failure to supervise agents
- Outright investment fraud
Your securities lawyer can file a FINRA arbitration case against your licensed financial advisor or broker-dealer if you have evidence of any of these things.
Particularly if you suspect investment fraud, you need an experienced securities fraud attorney who has represented investors who were harmed by wrongdoing. Some securities lawyers only represent brokers and financial advisers, or only represent companies that want to issue securities.
As you can see in the list above, however, investment fraud is not the only claim you can bring against an investment advisor or broker. They may have violated one of the duties they owed you. If this caused you to lose money, you may still have a securities law claim.
What are unsuitable investments?
An investment isn’t unsuitable just because it didn’t work out. It is one that your advisor recommended even though it didn’t fit the criteria for investments that you had already established.
Each investor has individual needs for their investments and an individual tolerance for risk. For example, a person who is nearing retirement generally needs to preserve their capital. They would generally be wise to choose less risky investments.
On the other hand, someone in their 50s who is trying to make up for a late start on retirement investing may need to take greater risks.
Your investment advisor or broker should have discussed your goals and risk tolerance with you before investing any of your money. If they recommended riskier investments than were appropriate for you and you lost money, you may have a claim.
If your losses were substantial, there is no time to waste. Talk to an experienced securities lawyer about any questions you have.
