Most cases involving brokerage firms involve the suitability of the recommendations that gave rise to the investments at issue. The securities industry has a “suitability rule” which essentially states that when a broker makes an investment recommendation, that recommendation must be consistent with a particular investor’s financial circumstances and needs. Therefore, each case is assessed on its unique facts.

In some cases, the safety, suitability, and/or risks of an investment may have been misrepresented. These types of cases may result in claims of securities fraud and/or common law fraud. They may also result in claims that the broker or investment advisor negligently misrepresented an investment.

Yet other cases may arise from a theory that the broker or investment advisor breached a fiduciary duty. Each case has its own unique facts. We can look at your situation in detail in order to let you know whether you have a meritorious claim and, if so, which legal theories might apply to your situation.

There are a number of different ways to calculate damages. The threshold measure is something called out-of-pocket losses. Out-of-pocket losses is really nothing more than looking at the amount of money that an investor put in versus how much they got back. Once we determine what the out-of-pocket loss is, then we can look at other alternative measures of damages. If there’s a claim that arises under a statute, it may be that we can get interest on that claim and possibly even attorney’s fees. There’s another measure of damages that’s known as well-managed account damages. Those damages are essentially looking at how the account would have done if it had been properly managed and then contrasting that with how the account actually did.

The short answer is yes. A securities firm is responsible to supervise the actions of its employees and may be held liable for employee misconduct, such as improper or fraudulent investment advice.

Suitability is a concept that’s unique to the securities industry. There’s a rule in the industry that says that when a broker makes a recommendation of either a specific investment or an investment strategy, that particular investment or strategy has to be consistent with a particular customer’s financial circumstances and needs.

The time limit for bringing a securities claim for the Florida Securities and Investor Protection Act is two years from the date the person knew or should have known there is an issue with the investment, but in no cases, more than five years. For other common law claims, it’s generally speaking four years, with the exception that for fraud it’s four years from the date they knew or should have known there is an issue with the investment.

Generally, no. Brokerage firms require their customers to sign agreements when accounts are first opened, which effectively waive their rights to go to court. As a result the customers are bound to go into arbitration more often than not with the Financial Industry Regulatory Authority (“FINRA”). We’re very actively involved representing people in those types of cases.

Most of them do. About 60% of them settle as a result of discussions between the lawyers for the parties. Another 15% or so settle at mediation. Mediation is an alternative to arbitration where a neutral third party mediator helps the parties to broker a settlement agreement.