So you've noticed that your stock portfolio has taken a turn for the worse. While various stock and investment-related problems stem from fluctuations within the market, some situations may warrant further investigation to determine whether or not your stocks have been mishandled. Some stock brokers may have charged excessive commissions, misinformed you about specific investments or even committed outright fraud. Here are some basic tips about what to do if your stocks have been mishandled by your broker.
- Consult with Your Investment Firm
Before attempting to take any legal action, consult someone at your investment firm to fix the problem. If you are unable to come to an arrangement with your broker, contact someone in the management.
Because the arbitration process is complicated and could take months or years to complete, speaking with someone at the investment firm is necessary before taking any other steps.
2. The Arbitration Process
If nothing has been resolved by personally speaking to your firm, the next step is to go to arbitration.
Arbitration is a process that's administered by the Financial Industry Regulatory Authority. Your case will be filed with them, and an appointment will be set for your hearing.
Often times, legal representation is needed in such situations. Consult a lawyer who is familiar with investment fraud and ask him if he sees anything that you haven't noticed. When you do go to arbitration, make sure your lawyer is comfortable in such situations and that you have at least one expert witness to testify on your behalf.
3. How to File
Filing a request for arbitration has been made quite painless. Investors can see the FINRA website to begin the process or search for similar cases that have been filed against their broker.
Cases that are for amounts less than $25,000 are usually handled by a single arbitrator and will only require a small amount of paperwork. Generally, a hearing is not required in such cases.
Cases that are for amounts greater than $25,000 are handled by a selected panel of three arbitrators and will take more time to process because of the necessity of a hearing.
The arbitration process has become simple over the recent years. Some investors can file claims by themselves. Consulting a lawyer is required once your case has been filed regardless of the size of your investment fraud case.
Vickie Hyde is a freelance writer and business student. In her free time, she enjoys painting, mountain biking and running.