Common Law Fraud (Scams) & Misrepresentations and Omissions under Federal Securities Laws

You might have a claim if your broker engaged in fraud, misrepresentations, and omissions. Frauds (lying and deceit), swindles and scams represent violations of specific rules created by state and federal government bodies to protect investors like yourself. If you notice all your investments act differently from the general market or how they were described to you, your broker likely engaged in common law fraud and misrepresentations and omissions under federal securities law. A New York investment fraud law firm like Malecki Law can review how the investments were sold to you at no cost. These concerns often involve specific lies a broker has told you or omissions of key facts by a broker making the balance of the information you have received untrue. Sometimes that takes place involving purported or expected initial public offerings, known as IPOs. It is important not to be misled or dazzled by such promises or so invest if you are not ready for speculation. Public offerings require great scrutiny and must be transparent and truthful. Other times, long traded stocks, bonds, and private equity investments can be misrepresented. Some brokers engage in theft or Ponzi schemes. In these situations, you may have a case.

FINRA aims to protect investors like you, by implementing many tools to carry out this mission. FINRA’s key topic, Protecting Investors from Misconduct provides information on tools, including heightened supervision, sanctions guidelines, statutory disqualification applications, qualification examination waiver guidelines, and restricted firm obligations.

In order to protect investors like yourself, FINRA has implemented heightened supervision requirements for associated persons that have engaged in misconduct. Your brokerage firm should determine whether an associated person, such as your broker, should be placed on heightened supervision, by considering their individual circumstances, including customer-related regulatory actions, disciplinary actions, and criminal matters. It is likely that your brokerage firm failed to detect your broker’s misconduct. It cannot be stated strongly enough that getting help from investment fraud attorneys in New York at Malecki Law is infinitely better than trying to “do it yourself.”

If it is determined that the associated person must be placed on heightened supervision, the firm should develop an adequate heightened supervision plan. For example, if the associated person’s historical misconduct was related to a particular product, the firm should examine the product and implement necessary supervision to limit future risks related to that specific product. The possibility that your brokerage firm was aware that your broker needed heightened supervision yet failed to place him or her on adequate supervision, could have resulted in your portfolio’s losses. Malecki Law’s experienced investment fraud lawyers in New York will review your broker’s background and your products in a free consultation.

FINRA revised its Sanctions Guidelines to provide more stringent sanctions that can be imposed on an associated person. Adjudicators can take into account customer arbitrations that had adverse results, when determining sanctions. For example, an associated person who engaged in a pattern of harm, can face more severe sanctions.

Firms must comply with certain FINRA rules in order to engage in a public offering, including the following three requirements: (i) file documents and information related to the public offerings, (ii) avoid unfair terms, and (iii) have additional requirements for offerings that have a conflict of interest. If you notice your investments declined after a public offering, your brokerage firm may not have complied with the relevant public offering rules. A New York investment fraud law firm like Malecki Law can review your potential case.