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What can
I recover in Arbitration?
A.
You can recover losses that you suffered as a result of
“stockbroker misconduct”. Losses that are the result of
market risks that you willingly or knowingly agreed to
may not be recoverable.
How
does arbitration work?
A.
The Stock Exchanges provide arbitration for the resolution
of disputes with stockbrokers and stockbrokerage firms.
A submission agreement and Statement of Claim are filed
together with a filing fee and hearing session deposit
with the Stock Exchange. The broker or brokerage firm
will respond with an “Answer” to the claim, and a hearing
is scheduled before an arbitration panel.
Do I have to go to arbitration, or can I file
a lawsuit?
A.
Most stockbrokerage firms include an arbitration clause
in their arbitration agreements. This means that any dispute
with your broker or brokerage firm must be resolved through
arbitration. You may not file a lawsuit if the dispute
involves your brokerage account or your broker.
How
do I know if I have a case worth pursuing?
A.
We will investigate your claim by reviewing the account
activity for broker misconduct. We request that the brokerage
firm send our office all account documentation. We provide
you with an authorization so that we can obtain this information.
Once copies of monthly statements and confirmations are
obtained, an analysis of the activity may reveal whether
unsuitable or excessive activity occurred and the amount
of losses suffered.
Do you charge to investigate whether I have a
case worth bringing?
A.
The Law Offices of Howard M. Rosenfield do not charge
for an initial consultation nor for the investigation
unless the client agrees to an hourly rate charge. Often,
Expert Analysis is useful in determining whether a claim
has merit, The Expert will charge a reduced rate for this
Analysis.
Do you charge for the Account Analysis?
A.
So that we can calculate the out-of-pocket losses and
trading costs incurred, we strongly recommend that an
account analysis be obtained. The account analysis will
reveal trading costs, margin costs, and the opportunity
costs associated with the account activity.
Can the broker or brokerage firm be made to pay
my legal and related expenses?
A. Generally, no, although under some laws including state
securities law, attorneys fees are recoverable by statute.
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What is “Stockbroker Misconduct”?
A.
The most common types of stockbroker misconduct include,
but are not limited to, the following:
a. Recommendation of “unsuitable” investments inconsistent
with a customer’s investment objective;
b. Excessive trading solely to generate commissions (also
called “churning”);
c. Unauthorized transactions, or buying and/or selling
without prior permission from the customer or other failures
to follow the customer’s instructions; and
d. Misrepresentation and breach of fiduciary duties to
the customer.
What does it cost to go through arbitration?
A.
The NASD and New York Stock Exchange require filing fees
and a hearing session deposit to file your arbitration
claim. The amount of filing fees and deposit depends on
the amount of the recovery sought. The NASD and NYSE fee
schedules are set forth below:
Are the cases taken on an hourly rate or contingent
fee basis?
A.
Since investors are often reluctant to throw “good money”
after bad, cases with merit are often pursued primarily
on a contingency fee basis. However, cases can also be
pursued on an hourly basis if the client prefers.
What
other costs and expenses are required?
A.
As mentioned above, arbitration requires the submission
of a filing fee and hearing session deposit. Other expenses
can include incidentals such as photocopying, witness
fees, long distance telephone charges and the like. However,
some cases require experts who are retained as consultants
or to testify, and their charges would be an additional
expense. These charges would be explained in our Retainer
Agreement.
How
much of my losses can I recover in arbitration?
A.
At a hearing, we must show that the broker or brokerage
firm’s misconduct caused the losses. Once we prove the
brokerage firm is responsible, the arbitrators will award
fair damages. Damages may be measured by “out-of-pocket”
losses together with interest, or by “market adjusted
damages” designed to make the investor “whole”, or by
any measure the arbitrators think is fair.
Will
I be required to provide personal information?
A.
Yes, income tax returns and other brokerage account information
are routinely required.
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