Valenti Hanley PLLC

Can you sue your broker over margin call liquidations?

2026-10-13T10:51:44Z

Losing your retirement money to a margin call can feel terrible. You might wonder if you can hold your broker responsible. Margin agreements usually let brokers sell your holdings without advance notice. However, you might have a claim if your broker broke industry rules. Learning these rules can help you decide what to do next.

What federal rules govern broker conduct in margin accounts?

Under SEC Regulation Best Interest, brokers who recommend transactions must act in your best interest based on your investment profile without placing their own financial interests ahead of yours. Additionally, brokers must provide you, if you are a non-institutional customer, with a margin disclosure statement before or when you open a margin account, and must notify you annually that the disclosure is available and will be provided upon request. If you file a legal claim, the judge might look closely at whether the advice or recommendations the broker gave you earlier were improper.

How FINRA arbitration handles investor-broker disputes

The Financial Industry Regulatory Authority (FINRA), a self-regulatory organization authorized by Congress to oversee U.S. broker-dealers, typically handles disputes between investors and brokerage firms. During a FINRA arbitration hearing, the arbitrator or arbitration panel reviews key evidence to determine whether misconduct occurred. They usually consider multiple important factors during their review:

Whether your advisor fully explained the margin risks before you opened the account
Whether the margin strategy matched your stated investment goals and risk tolerance
Whether the firm followed its own internal disclosure policies

If the evidence shows that the broker misled you or ignored your conservative financial goals, you might recover some of your losses.

How can a legal guide help?

If your broker recommended a margin strategy that did not align with your financial goals or failed to provide required disclosures, those facts may support a FINRA arbitration claim. A qualified securities attorney can review your account records, analyze your communications and guide you through each step of the legal process to help you pursue compensation.

Buying into a distillery? Contract and ownership issues to review

2026-09-18T19:58:24Z

Kentucky distilleries draw investors, founders and business buyers. A bourbon venture can offer real financial returns, but those returns depend heavily on how clearly the deal is structured from the start.This happens when co-owners do not define key terms before the venture starts. Those terms include financial rights, control and exit options. Planning early can protect the deal's value and each party's role.

Choose the right deal structure

A buyer should first decide whether to purchase assets or ownership interests. That choice affects debt risk, tax treatment and liability. Legal review should also cover licenses, leases, trademarks, equipment, real estate and contracts. Gaps in due diligence or contract terms can create legal and financial risk. Those gaps can reduce the value of the deal.

Set clear terms for co-owners

Many ownership disputes start after closing. Parties should address core issues before anyone signs final papers:

Ownership shares and capital contribution requirements
Voting rights and day-to-day management authority
Profit distributions and cash reserve policies
Transfer restrictions and buyout rights
Valuation methods and exit terms

A clear agreement gives each co-owner a defined role. It also reduces the risk of deadlock, deteriorating relationships and disputes that escalate into litigation. Strong drafting can prevent disputes that often grow from vague promises or side conversations.

Review investment and disclosure risk

Some distillery offerings may trigger securities laws. This happens most often when organizers raise money from passive investors. Those investors expect a return based on others' efforts. Whether a deal qualifies as a securities transaction depends on its structure and the law. Promoters and investors should confirm compliance before raising or accepting outside capital. Records, forecasts and offering materials should be accurate and complete. If a promoter overstates demand, barrel value or growth, an investor may face loss. That investor may also have legal remedies under federal or state law. These include claims based on misrepresentation.

Key takeaways for distillery deals

Distillery acquisitions involve layers of legal risk that standard business purchase agreements are not built to address. Alcohol licensing, barrel inventory valuation, co-owner governance and securities compliance each require specific terms and early review. Parties who define these issues before closing are better positioned to protect their investment and avoid disputes that can be difficult and expensive to resolve after the deal is done.

How Kentucky owners can protect personal assets from business debt

2026-09-18T19:58:29Z

Running a business comes with financial risks, especially when the business takes on debt. If the business cannot pay its debts, creditors may try to recover money from the owner if the owner is personally liable for those debts. Taking steps to protect personal assets can help reduce this risk.

What to consider when protecting personal assets

While no strategy offers complete protection, certain practices can significantly lower an owner's exposure to business debt. Business owners can take several steps to reduce the risk of personal liability for business debt, including:

Choosing a business structure carefully: Kentucky allows businesses to use several structures. Both LLC and corporation generally provide owners with protection from personal liability for business debts. However, this protection has limits. It does not cover every personal obligation.
Reviewing personal guarantees carefully: Lenders, landlords or suppliers may ask you to personally guarantee a business debt. This can make you responsible for the debt if the business cannot pay. Know your obligations before signing.
Maintaining proper business records: Accurate financial records, contracts and other business documents can show that the business operates separately. They can also show that owners keep business and personal affairs separate. Business owners should follow the rules for their chosen business structure.

Even with an LLC or corporation, an owner may face personal liability in limited circumstances. Kentucky courts generally consider whether the owner exercised such control over the business that the entity no longer had a truly separate existence. They also consider whether maintaining the liability protection would result in fraud or promote an injustice. Factors such as commingling personal and business funds or inadequate capitalization may support this analysis, but failing to follow business formalities alone does not automatically remove an LLC member's liability protection.

Protect personal assets through careful planning

Kentucky business owners should plan ahead for paying or managing business debt. Addressing debt early may help them avoid greater financial problems and take steps to protect their personal assets. When a business struggles with debt, an attorney can help the owner understand their options. This can help the owner make informed decisions before taking action that could affect personal property.

Are you liable if your franchisee makes a mistake in Kentucky?

2026-08-28T18:07:58Z

When a franchisee makes an operational mistake or faces a lawsuit, you might wonder if that liability can reach your company’s doorstep. The answer to that question usually comes down to one important factor: control. Here is how it usually plays out.

What makes a franchisor responsible for a franchisee's conduct?

While it is true that you hold greater control over the way a franchisee represents your brand, this is rarely enough to prove vicarious liability. Courts want to see real evidence that proves you controlled the specific action that caused the harm. For example, if you directed or had the contractual right to direct the exact activity that led to the lawsuit, a court may hold you liable.

How do Kentucky courts determine the level of control?

In business law cases, Kentucky courts look at several factors before reaching a conclusion. When evaluating vicarious liability, Kentucky courts may consider:

How much the franchise agreement gives you authority over daily operations
Whether you stepped in and made specific operational decisions
How much the franchisee stayed independent in running the business
Any real-world actions that suggest control beyond what the contract clearly says

If vicarious liability is proven, you are usually responsible for any damages that follow.

Protecting your franchise business when a liability claim arises

Determining whether you crossed the line from protecting your brand into controlling daily operations could be difficult. It requires careful review of franchise agreements, operational manuals and digital communications. An attorney experienced in business law can analyze these documents and develop a strong defense strategy based on the contractual and operational facts

What records should Kentucky cannabis businesses keep?

2026-08-17T15:07:41Z

Kentucky’s medical cannabis industry is regulated, and good records can help you prove that your business operates responsibly. Whether you run a dispensary, cultivation site, processor or facility, paperwork should tell a clear story about products, employees and operations. Record keeping can affect renewals and inspections. Kentucky’s program includes rules for inventory control, training, security, transportation, packaging, labeling and testing. So, your files should support each compliance area.

Paper trails that help keep your license safe

Your records should be accurate, current and easy to find. If regulators ask questions, you do not want to search through scattered notes or incomplete spreadsheets. Key records may include:

Inventory records showing cannabis received, transferred, processed, tested, sold, returned or destroyed.
Seed-to-sale tracking entries that match your physical inventory.
Employee files, including training records, role assignments and identification details.
Security records, such as visitor logs, surveillance checks, alarm reports and access logs.
Transportation documents showing delivery dates, routes, manifests and receiving parties.
Testing records, including lab results, batch numbers and product release information.
Packaging and labeling records that show products were prepared correctly.
Waste disposal records showing how cannabis waste was handled, witnessed and documented.
Sales and patient transaction records, where applicable, while protecting private information.
Incident reports for theft, loss, diversion, equipment failure, recalls or rule violations.
Maintenance and equipment logs documenting inspections, repairs and calibration of critical systems.

You should also keep copies of:

License documents
Local approvals
Vendor contracts
Procedures and internal audit results

These files can show that your business has a real compliance system, not just a written policy. Strong records can make inspections smoother and reduce confusion. Because cannabis rules can change, it helps to review your recordkeeping practices with a legal professional familiar with Kentucky’s program before a small gap becomes costly.

Taking action when aging parents fall victim to investment fraud

2026-08-17T15:07:27Z

Investment fraud can happen to anyone. Those who misrepresent opportunities, overstate returns and minimize risk can seek out clients of all ages and backgrounds. However, older adults are especially vulnerable to investment fraud. Their concerns about not only preserving their assets but also maximizing the returns they receive on their investments can make them ideal targets for those promising unrealistic returns on investments. For adult children who learn about major losses suffered by their parents, questionable promises or a lack of investment transparency, encouraging them to take legal action may be the best option available.

Fraud can warrant litigation

When investment professionals do not fulfill their duty to their clients and put their own enrichment or the benefit of outside parties ahead of what is best for their clients, they may be responsible for the losses their clients suffered as a result. Civil lawsuits can help those defrauded by financial professionals recoup the funds they lost. The people impacted by securities fraud may be able to file lawsuits to recoup the funds lost to the fraudulent scheme -- especially in cases where clear violations of securities law have occurred due to misrepresentation of key facts and unethical conduct. When older adults may still have funds under the management of an unreputable or fraudulent investment advisor, taking immediate action is often necessary to protect them from additional losses and help them recover funds lost due to fraudulent conduct. Concerned adult children may want to help their parents schedule an appointment with a securities fraud attorney and encourage them to take action before losses leave them without the resources they need in their golden years. Litigation can help recover lost investments and hold inept or corrupt parties accountable.

Understanding marijuana business law in Colorado

2026-08-13T08:53:56Z

Colorado has played a major role in the growth of the cannabis industry. For business owners, this creates opportunity, but it also requires careful attention to state rules and ongoing compliance. Marijuana business law in Colorado covers licensing, sales, product handling, public safety and taxation. Understanding these areas is important for anyone who wants to operate legally and reduce risk in a highly regulated market.

Licensing and regulatory oversight

Any marijuana business in Colorado must operate through the proper state approval process. This includes meeting licensing standards and following rules enforced by the Department of Revenue Marijuana Enforcement Division. Businesses must also understand that state permission does not remove all legal concerns. Marijuana remains illegal under federal law, which means owners should plan carefully before opening or expanding operations.

Recreational and medical market differences

Colorado law treats recreational and medical marijuana differently in several key ways. Recreational sales are limited to adults who meet the age requirement, while medical sales follow a separate system tied to patient eligibility.

Sales limits and consumer access

Colorado places clear limits on how much marijuana a person may purchase or possess. Businesses must monitor these limits closely during every sale to avoid violations. Retail operators should also remember that public consumption is still restricted because even when marijuana products are legal to buy, where and how they are used can still create legal issues for customers and businesses.

Payment rules and tax obligations

Marijuana businesses in Colorado face special tax and payment issues where recreational sales attract taxes that can affect pricing, reporting and profitability. Recent changes have expanded payment options in some situations, but strict procedures still apply. Also, businesses must maintain accurate records and ensure every transaction meets state requirements. Strong planning and reliable legal guidance can help marijuana businesses stay compliant and operate with greater confidence in a fast-changing industry.

What is unauthorized trading and how can investors spot it?

2026-08-17T15:06:51Z

Many people trust a financial adviser or broker to manage their investments. That trust depends on clear communication and informed decisions. If you notice trades that you did not approve, you may wonder whether someone acted without your permission. Learning how unauthorized trading works can help you identify problems early and protect your investments.

What is unauthorized trading?

Unauthorized trading occurs when a broker or investment adviser purchases or sells securities without your consent. In many accounts, you must approve each trade before the broker places it. Even in discretionary accounts, brokers must act within the authority granted and comply with applicable legal and regulatory duties.You give that authority in writing before the broker begins trading. Federal securities laws prohibit fraudulent or deceptive conduct involving the purchase or sale of securities. One example is Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b). Review your account agreement so you understand who controls trading decisions. Once you know your account type, you can recognize signs that deserve closer attention.

Warning signs to watch for

One unexpected trade does not always mean someone acted improperly. Still, these warning signs deserve a careful review:

You find trades that you did not approve
Your account suddenly shows many more trades than usual
You receive confirmations for transactions that you do not recognize
Your portfolio includes investments that you never discussed
Your broker cannot give a clear explanation for recent trades

Review your account statements often so you can spot unusual activity quickly. If you notice a concern, start collecting information right away.

What should you do next?

Keep your own copies of any communications you exchange with your adviser or broker, along with transaction confirmations and account statements.Note the dates of any unexpected transactions and document the discussions you had about them. If you did not grant discretionary authority, your broker generally should not place trades without your approval. FINRA Rule 3260 limits when brokers may exercise discretionary authority over customer accounts. Regular account reviews can help you identify unauthorized trading before it causes greater losses. Ask questions whenever something seems unusual and keep records of your concerns. If you have questions about this topic, you may consider reaching out to a legal professional for guidance.

3 must-have clauses in a business contract

2026-08-17T15:06:36Z

In business contracts, the absence of important clauses may land you in trouble. That is why you must craft an iron-clad business contract that includes all essential terms. Here is what you need to know about them.

Termination Clause

Be it a relationship or business contract, there is always a chance of things ending on contentious terms, though unintentional. While nothing can be said conclusively about the former, you can definitely control how things end in the latter. The termination clause can explain how and when the agreement should come to an end. It must include the following details:

Notice period
Basis for termination
Post-contractual obligations

This clause can also include directions regarding the future of ongoing projects.

Force majeure clause

A force majeure clause explains how both the parties mentioned in the contract should act in the case of unforeseen circumstances. A contract with no (or a vague) force majeure clause can lead to major financial losses during an unexpected event. One of the best examples is when retail chains in the U.S. attempted to withhold rent during COVID-19 but failed due to a lack of specific force majeure clauses. Some of the force majeure instances are:

Natural or man-made disasters
War and civil unrest
Pandemics
Labor disruption

Including these specifics helps clarify the scope of protected events, ensuring both parties have a clear understanding of their obligations during such times.

Indemnifying clause

Businesses are always susceptible to lawsuits. If one partner commits a mistake and a third party sues the business, who should cover the legal expenses? A properly drafted indemnifying clause can protect the innocent partner from resulting cost.

Draft an iron-clad business contract

There is no room for error in business contracts. A single clause mishap can become a costly mistake and lead to contract disputes. With the help of an attorney experienced in business law, you may be able to prepare a meticulously drafted contract that can protect you from foreseeable risks.

FINRA arbitration process: What investors should expect

2026-08-13T08:53:19Z

Facing a dispute with a brokerage firm is often overwhelming. Many investors are surprised to learn that most claims must go through the Financial Industry Regulatory Authority (FINRA) arbitration system. While this aims to resolve cases without the need for court intervention, the process still requires careful preparation. This overview explains what investors can generally expect during arbitration.

How FINRA arbitration begins

FINRA arbitration starts when an investor files a Statement of Claim that outlines the dispute and describes the losses. The investment or brokerage firm then formally responds to each allegation. This sets the foundation for the rest of the case, which typically involves:

Initial review helps determine whether the dispute involves unsuitable advice, misrepresentation or another form of misconduct
Timeline planning allows both sides to prepare for deadlines and required filings
Early strategy decisions often shape how evidence will be presented during the hearing

These early tasks help organize the case and promote a hearing phase that proceeds in a structured and efficient way.

What happens during the hearing process

A panel of one to three arbitrators hears the case. The size of the panel depends on the amount of the claim. Each side presents testimony, documents and arguments and the arbitrators may ask questions to better understand the facts. The hearing essentially functions like a streamlined trial in many situations.

Decisions and outcomes

Unless parties reach a settlement, arbitrators review all evidence and issue a written award, which is final and binding with extremely limited appeal options. If the investor wins, the award may include damages or interest, which the firm must pay within a set period. A legal representative can help by guiding the case through arbitration, building evidence and presenting the investor’s position.