Getting help with stock losses or fraud

Considerations when hiring a professional to help you.

If the worst happens, and you have losses that you don’t think you should have, you should hire an experienced professional to represent you and to help you recover your losses.

Hiring the right representative is every bit as difficult as hiring the right broker.   Disputes with stockbrokers and financial advisors are not new nor are they uncommon.  The securities industry has developed an arbitration system where public customers of brokerage firms have their disputes resolved in a way that is faster and less expensive than hiring a lawyer and suing in court. 
This arbitration system is managed by the stock exchanges and by the NASD, and overseen by the SEC and the Congress.  The arbitration system is neither perfect nor fool proof, but most of the thousands of customers who use it every year report some monetary recovery.

If your losses are limited to $25,000 or less there is a small claims procedure that investors can use themselves.  There is actually a number of law schools around the country that will assign a law student to help you prepare the paperwork. 
Many people lose hundreds of thousands or millions of dollars.  For larger claims, the NASD will provide three arbitrators who will read legal briefs, review trades and listen to live testimony.   Unless your claim is small, you should not try to take on the brokerage firm’s lawyers on your own. 

Finding the right representative to help you with a claim against a broker or investment advisor may be more difficult than finding a broker in the first place.  This is because there really is no one place or consumer group that rates all of the representatives.  It may harder to get a referral to a representative with this particular speciality, than it will be to get a referral to a stockbroker. 

Here are some questions that you should ask a potential representative:

• How many NASD arbitrations have you done and how long have you been doing it.  Ideally the answer will be more than 100 or 200 claims over a period of at least 10 years. 
• Have you done claims like mine and how many?
• Have you brought claims against the same brokerage firm before? The same office?   The same broker?
• Are you familiar with the investments that were in my account?
• Are you familiar with brokerage industry rules and regulations?
• Have you actually worked in the brokerage industry ?  Do you work closely with people who have? 

The PIABA Controversy

It is not necessary to hire an attorney to represent you in NASD arbitration.  A number of individuals who are not attorneys, but who have experience in the brokerage industry also represent customers in securities arbitration, and may bring both experience and insight to the resolution of your problem.

Attorneys don’t always agree with the above statement.  They believe that only a licensed attorney should represent customers in securities arbitration.  Our view- get the best representative for your claim, attorney or not.
Many of the attorneys who represent customers in securities arbitration belong to the Public Investors Arbitration Bar Association (PIABA).   Some, but not all, of the attorneys who belong to this association have considerable experience in this specialized area, and it would otherwise be simple to just to say get a PIABA lawyer.

The problem is two fold: First, to become a member of PIABA, an attorney needs only have handled a single arbitration.  This is not enough experience to be meaningful.   Second, PIABA prohibits its members from formally associating with a non-lawyer, such as a retired broker or branch office manager, even if that person could be helpful in prosecuting your claim. This prohibition may be unnecessarily restrictive. So be careful.  Attorney or not, hire experienced representatives only.