Securities Litigation Lawyer

When you buy a stock, or do business with a stock broker, you have every right to expect that laws and regulations will be followed. If you lost money on your investment because a company or broker violated the law, you may be able to recover your losses.

The securities litigation attorneys at Federman & Sherwood protect the rights of investors who lost money due to misconduct or fraud. We have significant experience representing plaintiffs in securities class action lawsuits and arbitrations as lead counsel. See our results.

Our securities litigation lawyers have also taken on brokers in FINRA arbitration proceedings. We can bring our brand of hard-hitting litigation to bear for you. Call us to schedule a free initial consultation.

Clients praise Federman & Sherwood for their versatility and diligent work. One client writes: “I had a very good experience working with this law firm. They were very professional and represented me well.”

The Legal Background for Securities Lawsuits

There are a myriad of rules and regulations that govern both issuers of securities and participants in the securities markets. On the federal level, issuers of securities must follow the Securities Act of 1933 and the Exchange Act of 1934. Market participants must also register with a self-regulatory organization, such as the Financial Industry Regulatory Authority (FINRA). These self-regulatory organizations are given rulemaking authority by the Securities and Exchange Commission. Registered representatives must also follow FINRA rules. Both federal securities laws and FINRA rules may allow you to take some type of legal action to recover losses for misconduct in connection with securities transactions.

Lawsuits for Securities Fraud

Federal securities laws require that issuers of stocks make complete and accurate disclosures of material information publicly. As a shareholder, the law gives you a private right of action to sue the company when its violation of the law costs you money. 

You may be able to file a securities fraud lawsuit when the following occurs:

• There is an intentional misstatement or misrepresentation in connection with the purchase or sale of a security,
• You relied detrimentally on this representation when purchasing the security, and 
• You suffered losses.

The company may be liable when it makes an affirmative misstatement, or when it has withheld material information that you would have otherwise needed to know when deciding whether to buy or sell the security.

You may also file a securities lawsuit for other illegal practices in connection with the sale of security, including:

• Insider trading.
• Ponzi schemes.
• Pump and dump.
• Breach of fiduciary data.

Arbitration for Securities Sales Practices

If your broker has violated the rules, you may take legal action against them. However, you are typically not able to file a lawsuit directly against a broker. When you opened your account, you signed an agreement that contains a mandatory arbitration provision (which the Supreme Court has upheld). You would have to file an arbitration case, which is usually heard by FINRA.

Arbitration does not mean that you will not get your day in court. It also does not mean that you would not be compensated for your losses when you are able to prove that your broker violated the rules. It does mean a different kind of legal process for which you need a securities lawyer who has experience in this forum.

Common examples of FINRA arbitration include:

• The broker makes recommendations for the client that
• Churning of the investor’s account to get more commissions
• Making affirmative misrepresentations to the customer
• Failure to diversify the customer’s account
• Misappropriation of the customer’s assets
• Breach of fiduciary duty owed to the customer

Regardless of whether you are suing a broker or a company, you need an experienced securities litigation attorney to represent you. These are very specialized types of lawsuits and legal actions that require an attorney who knows the specific law and procedure. In addition, brokers and issuers often have high-priced lawyers of their own to defend them from cases like yours. 

Damages in Securities Litigation Cases

If you are successful in an arbitration or lawsuit, you may be able to recover some or all of the losses that you experienced. If you lost money on a security that you bought when the issuer has made a misstatement or misrepresentation, you may recover damages under the “fraud on the market” theory. All of the stock price drop would be attributed to the misstatement.

If you win a FINRA arbitration, your damages could be calculated using the following methods:

• Your net out-of-pocket losses that you suffered from the wrongful conduct
• How much you would have made if your portfolio was well-managed
• Any trading losses you suffered

The FINRA arbitrator can also order the respondent to pay for your attorney’s fees. In some egregious cases, you may even receive punitive damages.

Contact a Securities Litigation Attorney Today

If you have lost money due to securities fraud, or your broker’s failure to follow the rules, let the securities litigation law firm of Federman & Sherwood fight for you. Call us today at 405-235-1560 or 1-800-237-1277 to schedule a free case review with one of our attorneys. You pay us nothing unless you win your case.