The short answer is yes, but how you do it and where you can do it are probably not what you expect.
For most investors, they cannot technically sue their stockbroker or investment firm. They are limited to addressing any claims through the Financial Industry Regulatory Authority (FINRA) arbitration. All broker dealer firms and stockbrokers are registered with FINRA, a self-regulatory organization (SRO) that is vested with the regulation of brokers and the enforcement of rules governing the brokerage industry.
For most customers, their original account agreement includes an agreement to submit any potential claim or dispute relating to their accounts to FINRA arbitration. In other cases, even if the customer does not have a signed arbitration agreement, a customer in some cases can mandate that the firm or the advisor by virtue of their FINRA membership agree to submit to FINRA arbitration.
In many cases this is unfamiliar territory for the investor or customer, as they may be more familiar with court and believing they can simply tell a judge or jury what happened and hopefully achieve some degree of justice. While that could be the case, the state or federal court process is often much slower, less efficient, more expensive, less final, and open to the public. By comparison, most FINRA arbitration cases are private, confidential, quicker, more efficient, and provide more finality to the same or a similar end result.
Keep in mind that FINRA arbitrators are not judges, not bound by precedent, not limited by rules of civil procedure or rules of evidence that govern court cases. While this can add to the unpredictable nature of the FINRA arbitration process, judges and courts can be unpredictable as well. In addition, in state or federal court litigation, there is typically extensive motion practice, depositions, and various hearing on a myriad of preliminary technical issues before the substance of the case can ever be presented to a judge or jury.
Once a FINRA arbitration is filed, it will typically require selection of arbitrators and shortly after that the discovery process will begin. Unlike state or federal court, discovery in FINRA arbitrations is comparatively streamlined. The selection and appointment of arbitrators can have a significant impact on your case, and the same goes for the handling of the discovery process.
Having an experienced attorney counsel you through that process can be extremely valuable. If you have any doubts in that regard, simply research the outcome of cases that were handled pro se (directly by the investor clients) against the firms. You will see that the majority of those cases result in little or no recovery and quite a few ?zero? awards.
Instead of a trial in court, a FINRA arbitration case will typically be resolved either at a final hearing (the FINRA arbitration version of a trial), or by settlement (typically the result of a direct negotiation between the parties or at a structured settlement conference called a mediation).
For many investors, having the assistance of an experienced attorney through the discovery process, someone who knows what records to request, and what to look for once they are produced/received is extremely valuable. In addition, the fact that there are typically no depositions taken in a FINRA arbitration is also something that many investors prefer, but it leaves investors with only limited means of gathering evidence.
Whether cases are resolved through direct negotiations, or in the course of a mediation, many clients (and many firms for that matter) prefer an outcome that is a private and confidential settlement, where the parties remain in control of the process and the outcome. Should a reasonable settlement not be a possibility, the Investment Loss Recovery Group will be fully prepared to continue to aggressively pursue your case through the final hearing (trial).
Once the arbitrators enter a final award, there is often little opportunity for either side to appeal or delay the process further. In the overwhelming majority of cases, that award represents the final conclusion.
While you cannot sue your stockbroker or investment firm in court, you can certainly file a FINRA claim and address any issues in an effort to recoup any losses or damages.
If you have questions or concerns regarding losses or the overall handling of your investment portfolio or your individual investments please contact the Investment Loss Recovery Group by phone or online. We will help you schedule a no-cost consultation and review.