Stockbroker Arbitration: Claimants Given Big Financial Awards

Washington, DCThey are the people you trust with your important financial decisions, but sometimes they can mislead and deceive you. In fact, based on news reports from the past 6 months, it seems as though more often than not stockbrokers are involved in illegal activities or deceptive practices. Luckily, you can turn to stockbroker arbitration to recover your lost money, but why should it have to come to that? It comes to that because of problems like stockbroker fraud and other schemes, which leave investors like you without the money they worked hard to earn.

As investors become more aware of the deceptive and misleading actions of their stockbrokers, they are turning more and more to stockbroker arbitration to recover their money. And, as the amounts that they claim they lost increase, so, too do the awards they are given.

Recently, a veterinarian was awarded $5.6 million in damages and interest in her stockbroker arbitration claim. The judgment came against RBC Financial, who allegedly failed to properly supervise her stockbroker when he put the claimant's money into dot-com stocks. Interestingly, the stockbroker was also the claimant's husband at the time of the investments.

According to documents filed in the case, the veterinarian received over $5 million as an inheritance. Most of the money was put into WorldCom and Level 3, which appeared to be good investments but crashed when the technology market crashed. The claimant alleged that her interests were not protected because her investments were not diversified into safer securities. Worse, the broker had his wife borrow against the portfolio so that gift taxes could be paid, increasing the investor's liability.

The $5.6 million award is one of the largest ever given to a Minnesotan by FINRA. The claimant had apparently tried to negotiate with RBC Financial regarding the losses but had been unsuccessful. The arbitration panel awarded the investor 100 percent of her losses, which was $4.35 million, plus an additional $1.25 million in costs and interest.

Although a FINRA claim may sound less daunting than filing a lawsuit, it is still important to have a lawyer help you with your claim. There are still forms to fill out and the arbitration process can be complex. Furthermore, there are a variety of regulations and deadlines that must be taken into consideration; issues that an experienced lawyer is familiar with.

It is also important to remember that your arbitration claim may not just be against your individual stockbroker. If it can be proven that your brokerage firm did not properly supervise your broker or did not fulfill its duties as a brokerage firm, it is possible that your claim can be filed against the financial company. Brokerage firms have a duty to properly hire and supervise their brokers and failure to do so can leave the firms liable for any losses suffered by investors.

You may not have lost over $4 million, but any losses suffered because of the unethical dealings of a broker are too high. That is money you worked hard for, money that you trusted to a person who was supposed to act in your best interests. It might be easy to sit back and say, "Lesson learned, I won't trust anyone like again," but the truth is that you should fight back. You deserve compensation if your broker violated his duty to you and engaged in inappropriate transactions with your money.

If you file an arbitration claim, there is a good chance you will get your money back. If you do not file a claim, there is a good chance you will never see your money again.