Louisiana Investment Loss Recovery Attorneys

From the sights and sounds of Bourbon St. in lively New Orleans to the home of Cajun cuisine, Louisiana is one of the premiere music and cultural centers in the country. Louisiana is also home to affluent retirement communities on the Gulf Coast. And where affluent retirees guard their nest eggs, Bayou alligators lurk to defraud them of their irreplaceable retirement funds. For over 25 years, the investment loss recovery law firm, Malecki Law, has provided legal representation to senior investors and retirees across the country who have been victimized by securities and financial fraud. The firm’s founder, Jenice L. Malecki, Esq., has recovered tens of millions of dollars for senior victims and retirees, and is a passionate advocate for serving the underrepresented, particularly elderly victims of financial abuse. This is an area that has held continued national focus by securities regulators like the Financial Industry Regulatory Authority (FINRA) and Securities and Exchange Commission (SEC).  FINRA arbitration is the forum where most retail securities disputes are required to take place (i.e., not the courts, to the surprise of many victimized investors). FINRA arbitration does, however, have some advantages over bringing actions in court, as will be discussed further below.

The focus on senior exploitation is not exclusive to national regulators, but also state regulators like the Louisiana Securities Division, which has acknowledged the same on its website: “Defrauding elderly investors of their life savings is now a multi-billion dollar problem in the United States. Our nation’s elderly continues to be potential targets for financial con artists, along with others seeking to take advantage of their trust.”

Some retirees are also particularly vulnerable because of age-related mental decline. As a result, a lot of misconduct can happen unnoticed in a senior account, which is why financial firms have duties to supervise the accounts and the individuals that service them. Financial firms additionally have “know your customer” (KYC) obligations, which means that changes in accounts belonging to seniors need to be monitored and investigated with special care.

FINRA’s supervision rule is codified under Rule 3110 of its customer arbitration code, stating:

“Each member shall establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules. Final responsibility for proper supervision shall rest with the member.”

Among other things, the subparagraphs of Rule 3110 require the establishment and maintenance of written supervisory procedures, the designation of licensed principals with authority to carry out and enforce the supervisory responsibilities, and the assignment of a supervisor to monitor the activities of each financial professional and the customer accounts they manage. 

Similarly, FINRA Rule 2090 is the “Know Your Customer” (KYC) rule, which expects supervisory oversight to be tailored to what a firm must know about its customers. FINRA’s KYC rule is drafted much more broadly than its Rule 3110 supervisory rule, and states in its entirety as a single sentence as follows: “Every member shall use reasonable diligence, in regard to the opening and maintenance of every account to know (and retain) the essential facts concerning every customer and concerning the authority of each person acting on behalf of such customer.”

As the above applies to all accounts, including senior accounts and those accounts where a senior is a named beneficiary, it is clear that financial firms are charged with an affirmative duty to understand transactions within and changes to an account in the context of who the account belongs to. In the case of a senior, large withdrawals and changes to an account should invite more supervisory scrutiny than for other investors generally – that is just part of knowing who the customer is, who has authority on the account, who can write checks, who can make withdrawals, and so forth. This is how the securities rules, such as supervision and KYC, in the above example, are expected to work together.

It is, thus, important for any investor seeking a recovery against large financial firms, with the above supervision and KYC obligations, to hire an investment loss recovery law firm that is fully familiar with industry supervision laws and KYC requirements, not to mention a law firm knowledgeable in securities laws and adept at navigating the FINRA forum, as well as state and federal courts when necessary. The investment loss recovery lawyers at Malecki Law have successfully litigated in all of these forums.

Losing one’s retirement savings is devastating, especially to seniors and retirees who are no longer in the workforce and will have no further opportunity to earn their nest egg back. Seniors do tend to rely more on the advice of a financial advisor than today’s mobile-phone-wielding younger generation, thus making them more vulnerable to abuse. It can be hard to spot a dishonest financial advisor, as financial advisory relationships are built on trust developed over many years.

Malecki Law is headquartered in Manhattan’s financial district and ensures proper representation as each state requires, including Louisiana, whether actions are brought in state or federal court, or in arbitration. The majority of lawsuits to recover retail investment losses are brought within FINRA’s arbitration forum, which has advantages such as providing a faster and more efficient way to recover losses than in court.

One often overlooked preventative measure is to utilize an easy online tool that most investors should take advantage of, which is to perform an online search regarding the adviser’s background. FINRA’s BrokerCheck website makes it possible to conduct a simple search by entering the name of the adviser and the firm he or she is registered with. BrokerCheck provides a public report about any prior customer complaints or regulatory concerns that an investor should know about. A separate search can also be conducted against the firm itself, which is normally named for its supervisory negligence in a lawsuit alleging that an account was not properly supervised.

Malecki Law’s investment loss recovery attorneys can help bring a faster result by ensuring seniors clients and other investors with serious medical issues apply for expedited case status from the very outset of filing a claim. Arbitration awards also provide few grounds for appeal, which means the case is typically over at award, where payment is due within 30 days of the conclusion of the award (a firm risks losing its license if it makes a late payment, adding additional leverage for the investor plaintiff). Court proceedings, on the other hand, can take many years with all levels of appeal that can delay things further. Senior citizens do not have that kind of time, which is why arbitration is often a preferred method of recovery. If you or any elder family members residing in Louisiana suffered financial losses in the markets and believe the account to have been mismanaged or poorly supervised, you need to contact an investment loss recovery law firm like Malecki Law. Schedule a free initial consultation by calling (212) 943-1233, or emailing jenice@maleckilaw.com.