We understand how crushing it feels when your alternative investments suddenly become financial disasters. Every day, we see investors dealing with this exact heartbreak, and there’s something important you should know: regulatory bodies like the SEC and FINRA require brokerage firms to conduct due diligence on alternative investments before recommending them to clients.
This guide walks you through the key steps to find the right Alternative Investment Loss Attorney who can help pursue recovery and hold negligent brokers accountable.
Your path to financial recovery begins with choosing the right legal advocate.
Key Takeaways
Table of Contents
- Over 90% of clients recover full or partial losses through experienced alternative investment loss attorneys like Haselkorn & Thibaut.
- Individual lawsuits may recover substantially more than class action settlements, which often return only a small percentage of losses.
- FINRA arbitration generally provides up to six years to file certain claims, with hearings often taking many months from start to finish.
- Alternative investments can carry higher brokerage fees than standard investments, which may increase incentives for aggressive or unsuitable sales practices.
- Free consultations and contingency fee arrangements mean no upfront costs or fees unless attorneys successfully recover your money.
Common Causes of Alternative Investment Losses
We see investors lose money in alternative investments for several reasons. These losses often stem from actions that violate securities laws and investor protection rules.
Fraud and Misrepresentation
Fraud and misrepresentation are among the most common and damaging forms of investment fraud. These deceptions involve false or misleading information about risk, return, or fees that investors receive.
Brokers may provide inaccurate details to push unsuitable investments. Commission incentives can drive many sales practices that harm investors, and sales pressure can also motivate misleading statements. In other cases, brokers simply lack a full understanding of complex alternative products.
Fraudulent schemes can take many forms. Ponzi schemes promise high returns while using new investor money to pay earlier investors. Churning involves excessive trading to generate commissions at the investor’s expense. Unauthorized trading occurs when brokers make trades without client permission.
Victims may have legal recourse through FINRA arbitration or litigation, and recoveries can include financial losses and, in some cases, attorney fees—depending on the facts and applicable rules.
Broker Negligence
Broker negligence happens when financial advisors fail to meet their obligations to clients, including providing suitable investment advice and disclosing relevant risks.
Common examples include recommending investments that don’t match an investor’s financial goals or risk tolerance, or executing trades without permission. Inadequate advice can lead to significant financial losses that could have been prevented with proper guidance.
Brokerage firms may also bear responsibility for inadequate supervision of their employees, which can contribute to negligence. Investors can pursue claims through arbitration or litigation to seek recovery for losses caused by misconduct.
Unsuitable Investment Recommendations
Another serious issue we see often is unsuitable recommendations. FINRA rules require brokers to have a reasonable basis to believe recommendations are suitable based on an investor’s profile.
Brokers are expected to consider factors like age, financial situation, risk tolerance, time horizon, liquidity needs, and investment objectives. Alternative investments can be high-risk and illiquid, making them especially problematic for retirees or investors who need access to funds.
In some situations, investors allege brokers mischaracterized products, overstated safety, or failed to explain liquidity restrictions and fees.
Identifying Red Flags in Alternative Investments
We need to spot warning signs before alternative investments drain our accounts. Smart investors learn to recognize these red flags early to protect their financial future.
Promises of Guaranteed Returns
Promises of “guaranteed” or “risk-free” returns are a major red flag. Alternative investments can involve complex structures and meaningful downside risk. If someone is pushing high, consistent returns without credible support—or urging you to act quickly—that’s a warning sign worth taking seriously.
Lack of Transparency
Many alternative investments involve less transparency than publicly traded securities. If you can’t get clear answers about performance, underlying assets, valuation methods, fees, or how your money will be used, that lack of disclosure can be a sign of elevated risk.
Complex product structures can make it difficult for investors to understand what they own, and in some cases, that complexity can be used to mask conflicts of interest or hidden costs.
High Fees and Hidden Costs
Alternative investments often involve higher commissions and layered fees than traditional investments. High fees can reduce returns immediately and, in some circumstances, create incentives for brokers to recommend products that pay them more—rather than what fits the investor best.
When fee disclosures are unclear or incomplete, that may form part of a misconduct claim depending on the facts.
The Role of an Alternative Investment Loss Attorney
When we lose money on alternative investments, we need skilled attorneys who understand complex financial cases. These legal professionals can:
- Investigate what happened and identify potential wrongdoing
- Determine whether claims should be brought in FINRA arbitration or court
- Gather documents and work with experts when needed
- Negotiate settlements and present cases to arbitrators or judges
- Pursue recovery of losses where supported by the evidence and law
How Haselkorn & Thibaut Can Help
Haselkorn & Thibaut, InvestmentFraudLawyers.com, specialize in fighting for investors nationwide and have offices in Florida, New York, North Carolina, Arizona, and Texas. With over 50 years of experience, a 98% success rate, and No Recovery, no fee, our team focuses on recovering losses tied to investment fraud, securities fraud, and stockbroker misconduct.
Main Phone: +1 888-885-7162
Website: InvestmentFraudLawyers.com
Investigating Claims of Fraud or Negligence
We begin by reviewing documentation and communications for evidence of fraud, misrepresentation, negligence, or supervisory failures. This can include offering materials, account statements, trade confirmations, and advisor communications.
We may also review a broker’s background and disclosures to identify potential patterns of misconduct. Where appropriate, expert analysis can help explain product features, suitability concerns, and damages.
Because deadlines can apply, timely action is important.
Navigating Legal and Arbitration Processes
Many alternative investment disputes are resolved through FINRA arbitration, which includes pleadings, discovery, hearings, and a final award. Other cases may proceed through litigation, depending on the facts and the agreements involved.
Mediation or settlement negotiations may also resolve a case without going to a final hearing. Forum selection and strategy matter—experienced guidance can improve outcomes.
Recovering Financial Losses
Once liability theories are developed and damages are calculated, the goal is pursuing maximum recovery supported by the evidence—whether through settlement or an arbitration award. In many situations, individual claims can provide meaningfully better recoveries than broad class action settlements.
Types of Alternative Investments Often Involved in Loss Cases
Certain products appear frequently in loss and misconduct claims, including:
- Real Estate Investment Trusts (REITs): Particularly non-traded REITs with liquidity constraints and higher commissions.
- Hedge Funds: Often complex, less transparent, and may have lock-ups and performance fees.
- Private Equity and Private Debt: Typically illiquid, with valuation challenges and limited disclosure.
- Commodities and Futures: Volatile and complex, sometimes involving leverage and derivatives risk.
Legal Grounds for Investment Loss Recovery
Depending on the facts, recovery efforts may involve legal theories such as:
- Breach of fiduciary duty (where applicable)
- Unsuitability under FINRA rules
- Misrepresentation or omission of material facts
- Failure to disclose risks, fees, or conflicts
- Negligent supervision by a brokerage firm
The Benefits of Hiring an Experienced Attorney
- Expertise in securities law and FINRA procedures
- Ability to navigate arbitration, mediation, or litigation efficiently
- Stronger case development and damages presentation
- Improved settlement leverage and recovery strategy
Questions to Ask When Choosing an Attorney
- What is your track record in alternative investment loss cases (FINRA and litigation)?
- Do you offer a free consultation?
- Do you work on contingency (No Recovery, no fee)?
- What experience do you have with my specific product (non-traded REIT, private placement, hedge fund, etc.)?
- Who will handle my case day-to-day, and how will communication work?
Steps to Take If You Suspect Fraud or Negligence
Gather Relevant Documentation
Collect account statements, trade confirmations, emails/texts, notes from calls, marketing materials, offering documents, and new account forms (risk tolerance/investment objectives). Don’t discard anything.
Contact an Investment Loss Attorney
If you believe misconduct occurred, speak with an attorney quickly to understand your options and deadlines.
Haselkorn & Thibaut (InvestmentFraudLawyers.com)
Main Phone: +1 888-885-7162
No Recovery, no fee
Free consultations available
File a Complaint with FINRA or the SEC (When Appropriate)
In some circumstances, filing a regulatory complaint can create an official record and may trigger review. Your attorney can advise whether and when to file, based on your case strategy.
Conclusion
Choosing the right attorney can make all the difference in recovering alternative investment losses. With experienced representation, investors can pursue accountability and work toward financial recovery through the appropriate legal forum.
