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As a Superlawyers-rated Finra Arbitration Attorney, Daniel A. Bakondi, Esq. and his team are experts in investment loss recovery, having successfully obtained millions of dollars in recoveries fighting for clients in investment loss cases and securities dispute matters.  

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It is our business to know how to recover your investment loss. We represent investors seeking financial recovery for investment losses in claims against securities brokers, financial and investment advisors, and FINRA-registered broker-dealer financial institutions in FINRA arbitration customer claims, securities litigation in state and federal court, AAA and JAMS arbitration, and other forums.  

 

If you have unexpected and substantial losses in an investment, you should speak with a qualified attorney now. It may not be your fault, nor the fault of the market. 

 

Only an experienced securities litigation and investment loss recovery lawyer can tell you if a seller, sponsor, organizer, broker, financial advisor, or financial institution violated securities laws, regulations, state law, federal law, industry practices, failed to disclose risks, acted without your authorization, made an unsuitable investment recommendation, failed to diversify, failed to properly do their due diligence, failed to properly research the investment product offered, or acted with a conflict of interest.

 

Securities laws violations, negligence, and other misconduct are especially egregious if the transactions involve elderly investors, funds set aside for retirement or medical care, or funds constituting a substantial percentage of an investor's total net worth.

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Your investment advisor will never tell you what rules and disclosures they violated in selling you investments, or what they knew or should have known but didn't properly warn you about. We will.

 

FINRA Arbitration Attorney services include lawsuits and claims against investment advisors and broker-dealers to recover for investment losses in state or federal court, FINRA securities arbitration claims, or AAA Arbitration claims, based on:

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• Unsuitable investments for an investor's risk tolerance and investment objectives

• Conflict of interest in stock and investment recommendations

• Too risky/highly-speculative investments

• Private Placement and Regulation D violations

• Illiquid and highly-speculative private placements

• Alternative investments and non-conventional investments

• Failure to qualify investors as sophisticated or accredited

• FINRA arbitration of tenancy in common/tenant in common (TIC) investments

• FINRA arbitration of securitized real estate projects and investment losses

• FINRA arbitration of oil, gas, and energy investment losses

• Crypto and digital currency account, wallet and investment loss recovery

• Lawsuits/claims against brokers, investment advisors for failure to do due diligence

• Failure to know your customer

• Material misrepresentations or omissions - securities fraud arbitration and lawsuits

• Material omissions, failure to disclose conflicts of interest, due diligence failures, and problems with the investment, investment company, or its principals

• Breach of contract, offering terms, broker-dealer relationship

• Breach of fiduciary duty; duties of trust, disclosure, loyalty

• Bad/negligent recommendations of investment products

• Stock broker and financial advisor malpractice

• Ponzi schemes, pyramid schemes, and other fraudulent activities

• Bad sponsors, managers, and deal structures

• Failure to diversity and over-concentration

• Selling away 

• Overtrading and churning

• Exploitation and elder financial abuse

• Claims for selling unqualified securities, unregistered securities, and non-exempt securities

• Prospectus and Private Placement Memorandum fraud and nondisclosures

• State/Federal securities law violations

• Violation of industry practices 

• Failure to inform of tax consequences

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FINRA Arbitration lawyer services include claims against brokers, financial advisors, and broker-dealer firms for malpractice and violations, including:​​​

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• Securities fraud, stock broker fraud, and investment fraud

 

Securities fraud can include misrepresentation or failure to disclose material facts about an investment, institution, product, sponsor, or selling process. It may involve failure to disclose a broker commission, the history of the sponsor or details about projections, or the relationship between the broker and the investment. Private Placement Memorandums (PPM) which contain facts, information, disclosures, and projections about the investment must be closely analyzed based on the facts at the time. An investor may not know what material facts went undisclosed in the course of making an investment. As FINRA arbitration attorneys, we often have access to information, appraisals, broker-dealer communications, product assessments, alternate investment products, and other undisclosed materials and facts, which, had the investor been aware of, would have made a material difference in the decision to invest. We are able to distinguish between opinion and huffing, and material misrepresentations and non-disclosures.

 

Under California law, Cal. Corp. Code § 25401 - Unlawful acts in connection with offer, sale, or purchase of security, states:

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"It is unlawful for any person to offer or sell a security in this state, or to buy or offer to buy a security in this state, by means of any written or oral communication that includes an untrue statement of a material fact or omits to state a material fact necessary to make the statements made, in the light of the circumstances under which the statements were made, not misleading." 

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Each state has their own version.

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Under federal law:

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SEC Rule 10b-5, codified at 17 CFR 240.10b-5, 15 USC 78j, states:

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"It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, 

(a) To employ any device, scheme, or artifice to defraud, 

(b) To make any untrue statement of a material fact or to omit to state a  material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or 

(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, 

in connection with the purchase or sale of any security."

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Additionally, FINRA has substantial rules and regulations governing broker and financial advisor obligations regarding disclosures and conduct in connection with the purchase and sale of a security. 

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• Unsuitability or selling unsuitable investments

 

Not all investments are suitable for all investors. Some investments, because of inherent problems in structure and quality, are not suitable for any investor. The same investment may in some cases be more appropriate for a sophisticated, young, wealthy individual who understands its nature and risks, and yet not an appropriate recommendation for an elderly or retired investor who is not knowledgeable, who may have medical needs, or have other relevant factors. 

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FINRA Rule 2111 Suitability requires reasonable diligence by a member or associated person in determining an investor's investment profile, including "investment profile includes, but is not limited to, the customer's age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation."

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FINRA divides suitability into three separate categories.

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Reasonable basis suitability "requires a member or associated person to have a reasonable basis to believe, based on reasonable diligence, that the recommendation is suitable for at least some investors." Some investment recommendations and investment products are so structurally flawed that they are not suitable for any investor.

 

The customer-specific obligation of suitability "requires that a member or associated person have a reasonable basis to believe that the recommendation is suitable for a particular customer based on that customer's investment profile, as delineated in Rule 2111(a)." This is based on the investor's specific background, circumstances, experience, knowledge, and goals.

 

Quantitative suitability looks beyond the individual investment in isolation to view the recommendation's appropriateness in the context of the big picture of actions and recommendations. Factors looked at include "No single test defines excessive activity, but factors such as the turnover rate, the cost-equity ratio, and the use of in-and-out trading in a customer's account may provide a basis for a finding that a member or associated person has violated the quantitative suitability obligation."  

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• Breach of fiduciary duty in selling investments

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A financial advisor or broker is a fiduciary and owes a fiduciary duty to a client under both state and federal law, and FINRA rules. (See, ie. Cal. Corps. Code §16404, Securities Exchange Act of 1934, Section 15(c), and FINRA Rules 2010, 2020, 2241, and 2242. (See also, "an investment advisor is a fiduciary", SEC v. Capital Gains Research Bureau, Inc., 375 U.S. 180, 194 (1963))

 

Included within that bundle of obligations are a fiduciary duty to exercise reasonable care, a fiduciary duty of undivided loyalty, a fiduciary duty of disclosure, a fiduciary duty of good faith and fair dealing, and a fiduciary duty of confidentiality. As one example, high broker fees and commissions, perhaps not fully and properly disclosed, may impact an investment advisor's decision to make a recommendation. By putting the broker's interests ahead of the client, the broker may be violating the duty of loyalty, as well as the duty of due care, and the duty of disclosure.

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• Negligence and breach of the duty of care 

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Negligence includes not only careless conduct by a broker or financial advisor, but any conduct that falls below the laws, rules, guidelines, and standards of care demanded of professionals. These include FINRA Rule 2090 to know your customer. The sale of any investment based on a recommendation that falls short of industry standards may constitute a negligent recommendation on the part of the broker or financial advisor. The Securities and Exchange Commission published an interpretation of the standard of conduct for investment advisers under the Investment Advisers Act of 1940 [15 U.S.C. 80b] laying out some of these requirements. As discussed in these guidelines, investment advisors' fiduciary duty of care includes (but is not limited to)

 

1. Duty to Provide Advice that is in the Best Interest of the Client

2. Duty to Seek Best Execution

3. Duty to Provide Advice and Monitoring over the Course of the

Relationship​​​

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• Overconcentration

 

Overconcentration is the recommending of investments that place more than 20% of an investor's assets into one asset class (or one type of investment). Without proper regard for diversification, even otherwise suitable investments may fall short of industry standards. 

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• Failure to supervise, and negligent supervision

 

Finra arbitration claims often involve a broker dealer or investment brokerage firm, possibly one the investor was not even aware as being behind the transaction. Yet, these broker dealer firms are responsible for supervising the broker, and approval of the investment product for sale.    

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• Failure to do due diligence 

 

Broker dealer firms are required to approve every investment sold through them, and every transaction sold by the brokers under them. They have an affirmative duty to research investments, and understand their quality, the background on the principals, and ensure that the investment is what it purports to be. Many broker dealers fail to do this, and fail to verify sponsor claims regarding investments they then sell to investors, such as relating to the product's financials. This is a violation of the brokers' and brokerage firm's duty to the the investor as a fiduciary. As FINRA arbitration attorneys, we focus on understanding exactly what due diligence and independent research was done, what documents were obtained, and what aspects of the investment were assessed and evaluated. Such documents are often only available after we file a claim and demand these documents and records as part of the arbitration discovery process.
 

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Frequently asked questions about FINRA securities arbitration:

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What is FINRA Arbitration?

 

FINRA arbitration is a forum for resolving disputes, like court, for Financial Industry Regulatory Authority (FINRA) registered and licensed investment brokers and advisors, and their associated firms. FINRA, formerly NASD (National Association of Securities Dealers), is the licensing department of the SEC (Securities and Exchange Commission).  All securities brokers, broker-dealers (firms that sell securities) must have a license to sell securities, and are regulated by FINRA. When a broker or broker-dealer violates selling practices or the law, they may have liability under the law, including in some cases to return the investor's investment capital, or compensate the investor financially for their loss. FINRA is the forum set up by the SEC for resolving such disputes.

 

Is FINRA Arbitration better than court? 

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Often times, FINRA arbitration is faster and more efficient than court. Sometimes a claimant or plaintiff has a choice of forum, and other times the investor is required to bring their claim in FINRA arbitration.

 

Is FINRA arbitration mandatory?  

 

FINRA arbitration is usually mandatory for disputes involving associated members, registered representatives, brokers, and broker dealer financial institutions.

 

How long does FINRA arbitration take?

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FINRA arbitration can take as little as one year from filing of a claim to an evidentiary hearing, which is the equivalent of a trial. Court is likely to take longer, possibly 2-4 years on average to get to trial. 

 

Is FINRA arbitration binding?

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Yes, FINRA arbitration is binding, like a court judgment, and there are no appeals in most cases. 

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Do brokers and broker dealers have to pay the amount of a FINRA award?

 

Yes, under FINRA rules, they are required to pay any amount the FINRA arbitration panel determines the investor is entitled to. The FINRA arbitration award can be perfected into a legal judgment, if the required compensation to the investor has not been paid. In fact, brokers and broker dealers can risk losing their license to sell securities if they do not comply with a FINRA arbitration award.

 

Do I need an attorney for FINRA arbitration?

 

The securities litigation and arbitration world is complex. Even an investor with a strong case may not prevail without the proper and experienced guidance of a FINRA Arbitration Attorney.  This is similar to how even innocent criminal law defendants may be convicted without an attorney. 

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Our experience in securities litigation and arbitration and broker disputes are utilized to maximize your recovery dollar. We often know the legal issues, the surrounding facts, the opposing firms and brokers, insurance matters, the other side's likely defenses and how to get around them. Often times, you may receive a financial settlement without ever having to go to trial. Whether you believe you have a case or not, contact us now for a free no-obligation confidential consultation. You must act before your rights expire.   

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Sometimes, we takes cases on a contingency fee basis, meaning there are no attorney fees unless there is a recovery to you, and attorneys fees are a percentage of the recovery obtained for you.  

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Please contact Attorney Daniel Bakondi today for a free consultation, and to discuss what we may be able to do for you.

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What is the statute of limitations for securities fraud?

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This is not an easy question. Statutes of limitations, or the time in which you must bring legal action, can vary from one to five years. However, they can often be tolled based on delayed discovery, hidden facts and concealment, and efforts to thwart bringing of legal action. 

 

FINRA has a 6-year eligibility period, Rule 12206, which runs from the "event or occurrence giving rise to the claim." However, this is often not the sale of the security, but rather, is often based on other later events, including as when the investor knew they were harmed. Attorney Bakondi is experienced in successfully arguing disputed statute of limitations and timeliness matters, and is well-versed in applicable principles including delayed discovery, concealment, and equitable tolling.   

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What if someone makes an investment recommendation or sells a security but is not licensed through FINRA? 

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There are many people offering investment advice and investment products in one form or another who are not licensed. Some may even claim they do not offer investment advice right as they are offering investment advice. Some will ask you to agree that the investment is not a security despite that it is a security. Our law firm handles securities litigation and investment loss recovery whether or not the seller or offeror is licensed and registered with FINRA, a real estate broker, holds another credential or license, or holds none. For more on this, see this information about investment loss and securities litigation attorney services in state and federal court.

We also provide AAA and JAMS arbitration attorney services over investments and other business disputes.

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Investment Fraud and FINRA Arbitration Attorney for Investment Loss Recovery for Investment Disputes and Losses and Financial Advisor Errors and Negligence

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Our law firm handles all types of FINRA arbitration investment loss recoveries, including unsuitable investment products, failure to do due diligence, securities fraud, failure to supervise, and breach of fiduciary duty. Types of investment products include, but are not limited to:  

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• Cryptocurrency / Bitcoin investment loss litigation and arbitration

• Oil and Gas and Energy Securities Investment losses and FINRA Arbitration

• Hedge fund investment loss recovery securities litigation attorney

• Securitized real estate investment loss recovery attorney

• Private Placement investment loss arbitrations

• Commodities losses

• Tenant in common 1031 TICs investment loss recovery

• Non-traded REIT (real estate investment trusts) investment losses 

• Alternative investment and non-conventional investment losses

• ETFs investment losses

• Stock market losses

• Loan funds, investment notes, bond funds, commodities, convertible notes

• Churning and overtrading of stocks, bonds, and other investments

• Stock price drop losses and stock manipulation

• Stockholder rights violations

• Auction rate securites

• Complex derivatives

• Penny stocks

• Options losses due to breaches in terms

• Sale of unsuitable, overly risky, or speculative investments

• Third Party Custodians of Self-Directed IRAs

• Any other large investment or business loss 

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Which investment firms have the highest numbers of complaints against brokers regarding investments?

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According to reporting by Securities Litigation Consulting Group (SLCG). The owner of SLCG, per this notice has put out a warning on brokerages in 2024, including: 

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https://www.linkedin.com/pulse/2024-brokerage-firm-risk-rankings-craig-mccann-gtbce

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• Centaurus Financial, 

• Aegis Capital, 

• Western International Securities, 

• Independent Financial Group, 

• Berthel Fisher, 

• Crown Capital, 

• Calton, 

• JW Cole, 

• United Planners, 

• Money Concepts, 

• Kovac Securities, 

• Oppenheimer, 

• Cetera, 

• Wedbush, and 

• Triad Advisors.

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Additionally, reports on 2023 numbers include:

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Worst firms by current Broker's history of resolved complaints:

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1. ARETE WEALTH MANAGEMENT

2. AEGIS CAPITAL

3. CENTAURUS FINANCIAL

4. MADISON AVENUE

5. WESTERN INTERNATIONAL

6. INDEPENDENT FINANCIAL

7. GREAT POINT CAPITAL

8.   BERTHEL FISHER

9. CROWN CAPITAL SECURITIES

10. B RILEY WEALTH

11. MUTUAL SECURITIES

12. JW COLE FINANCIAL

13.   KOVACK SECURITIES

14.   CALTON ASSOCIATES

15.   INNOVATION PARTNERS

16.   INSIGNEO SECURITIES

17.   IFP SECURITIES 

18.   UNITED PLANNERS' FINANCIALSERVICES OF AMERICA

19.   AGP / ALLIANCE GLOBAL

20.   OPPENHEIMER

21.   MONEY CONCEPTS CAPITAL

22   VANDERBILT SECURITIES

23   OSAIC INSTITUTIONS

24   LION STREET FINANCIAL

25   TRIAD ADVISORS

26   BANKERS LIFE SECURITIES

27   MOMENTUM INDEPENDENT NETWORK

28   PROSPERA FINANCIAL SERVICES

29   PACKERLAND BROKERAGE SERVICES

30   JANNEY MONTGOMERY SCOTT

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The worst firms by firms' history of resolved complaints:

 

1 CENTAURUS FINANCIAL

2 AEGIS CAPITAL

3 WESTERN INTERNATIONAL

4 NATIONAL SECURITIES

5 BERTHEL FISHER

6 CROWN CAPITAL SECURITIES

7 AUSDAL FINANCIAL PARTNERS

8 FIRST ALLIED

9 SANTANDER SECURITIES

10 TRIAD ADVISORS

11 BOK FINANCIAL SECURITIES

12 INDEPENDENT FINANCIAL

13 FORTUNE FINANCIAL SERVICES

14 CETERA

15 UNITED PLANNERS' FINANCIAL SERVICES OF AMERICA

16 OPPENHEIMER

17 WEDBUSH SECURITIES

18 VOYA FINANCIAL

19 MONEY CONCEPTS CAPITAL

20 CALTON ASSOCIATES

21 GENES WEALTH MANAGEMENT

22 APW CAPITAL

23 CUNA BROKERAGE SERVICES

24 JW COLE FINANCIAL

25 VR FINANCIAL

26 MUTUAL SECURITIES

27 PROSPERA FINANCIAL SERVICES

28 NEXT FINANCIAL GROUP

29 KOVACK SECURITIES

30 BANKERS LIFE SECURITIES

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Worst firms by broker's history of pending complaints:

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1 CENTAURUS FINANCIAL

2 AEGIS CAPITAL

3 ARETE WEALTH MANAGEMENT

4 WESTERN INTERNATIONAL

5 GREAT POINT CAPITAL

6 INNOVATION PARTNERS

7 MADISON AVENUE

8 INDEPENDENT FINANCIAL

9 IFP SECURITIES

10 VANDERBILT SECURITIES

11OSAIC INSTITUTIONS

12 FORTUNE FINANCIAL SERVICES

13 JW COLE FINANCIAL

14 CALTON ASSOCIATES

15 B RILEY WEALTH

16 BERTHEL FISHER

17 KOVACK SECURITIES

18 MONEY CONCEPTS CAPITAL

19 STIFEL INDEPENDENT ADVISORS

20 UNITED PLANNERS' FINANCIAL SERVICES OF AMERICA

21 CROWN CAPITAL SECURITIES

22 MOMENTUM INDEPENDENT NETWORK

23 NEXT FINANCIAL GROUP

24 KESTRA INVESTMENT SERVICES

25 PRIVATE CLIENT SERVICES

26 GENEOS WEALTH MANAGEMENT

27 OPPENHEIMER

28 CETERA

29 M HOLDINGS SECURITIES

30 PURSHE KAPLAN STERLING

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Overall worst firms:

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CENTAURUS FINANCIAL

2 AEGIS CAPITAL

3 WESTERN INTERNATIONAL

INDEPENDENT FINANCIAL

5 BERTHEL FISHER

6 CROWN CAPITAL SECURITIES

7 CALTON ASSOCIATES

8 JW COLE FINANCIAL

UNITED PLANNERS' FINANCIAL SERVICES OF AMERICA

10 MONEY CONCEPTS CAPITAL

11 KOVACK SECURITIES

12 OPPENHEIMER

13 CETERA

14 WEDBUSH SECURITIES

15 TRIAD ADVISORS

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And the worst 10 firms rated for complaints over illiquid products:

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1. 1  BERTHEL, FISHER & COMPANY

2. 2  SIGMA FINANCIAL CORP

3. 3  INDEPENDENT FINANCIAL GROUP

4. 4  GENEOS WEALTH MANAGEMENT

5. 5  SECURITIES AMERICA, INC.

6. 6  CENTAURUS FINANCIAL, INC.

7. 7  QUESTAR CAPITAL CORP

8. 8  FIRST ALLIED SECURITIES, INC.

9. 9  NEXT FINANCIAL GROUP , INC.

10. 10  CROWN CAPITAL SECURITIES, L.P.

 
* All the above based on this report, and reports and statements by SLCG and its principal:

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http://www.slcg.com/pdf/workingpapers/Rating%20Brokerage%20Firms%20by%20Their%20Complaint%20Histories.pdf

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https://www.linkedin.com/pulse/2024-brokerage-firm-risk-rankings-craig-mccann-gtbce

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​For more news on securities fraud attorney matters, click here.

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Finra arbitration mediation attorney representation

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Often, unrepresented parties or parties without qualified representation in FINRA arbitrations will find themselves with the possibility of attending mediation. It is not too late to bring in a qualified attorney to help assess your case, represent you in the arbitration as well as mediation, and maximize your result. Here is more on FINRA arbitration mediation strategy and lawyer representation. 

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The law limits your time to take legal action.  After, your time to file a claim expires, preventing you from receiving a recovery you may otherwise be entitled to. Contact us and speak to a FINRA arbitration attorney today.

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