Rice & Company, LPA
Kollin L. Rice, Attorney at Law
2424 Woodville Rd
Oregon, OH 43616
 (419)697-2424
(419)697-3993 fax

Listening to you.  Fighting For You.

email: kollinrice@yahoo.com

Call now 419-697-2424


Financial Advisor Malpractice and FINRA Arbitration Claims

Has your broker left you broker?

I’m Kollin Rice. In my years as a lawyer I have seen many people who have been the victims of negligence and unscrupulous behavior.

Not too long ago, I was licensed as a Series 6 Registered Representative. I could legally sell various types of investments. I am knowledgable about investing and thought I might be able to help my clients by advising them in this way. But by the time I earned this license, a few important things became clear to me:

1. The training required to obtain a license to sell investments is simplistic and does not provide anything remotely close to sufficient training on how to determine what is a good or suitable investment.

2. The interests of an investment broker are often in opposition with the best interests of the client.

Ultimately, I decided that due to this inherent conflict, I could not ethically combine selling securities with my law practice, where I am ethically bound to put the interests of my clients first.

Investment Brokers, due to either their inadequate training or the temptation to succumb to the inherent conflict of interest, sometimes give their clients bad advice. This bad advice sometimes costs their clients a lot of money - their life savings even.

FINRA, the Financial Industry Regulatory Authority governs the conduct of brokers licensed to sell most securities, and has set up a system where investors who have been harmed by their brokers’ and advisors’ actions can take these claims to arbitration. They can often assert claims not just against the individual advisor, but against the larger entity that employs the advisor.

Arbitration in these cases in mandatory and binding. This results in a process that is generally quicker and simpler than a lawsuit, and generally provides the consumer with a fair opportunity to present their case. Arbitration is, however, governed by complex rules, and an experienced attorney is essential to successfully pursuing such a claim.

Arbitration claims can cover stocks, bonds, mutual funds, annuities, and other securities. In some instances there may be state law or court remedies as well.

Claims are not limited to incidents of outright fraud. Some of the actions that give rise to claims include:

Excessive trading or “churning” “Churning” is excessive trading of an investor's account in order to generate broker commissions. In “churning” cases, a stockbroker makes unnecessary—or even harmful—trades on an account to generate more commissions. This can sometimes take the form of making multiple small trades which generate more commissions than a single larger one.

Unsuitability It is required that a financial advisor’s investment recommendations be appropriate for your risk tolerance, overall financial situation, or investment objectives. The advisor is required to make a reasonable inquiry into your needs, situation, and risk tolerance before recommending investments to you. Suitability claims frequently involve recommendations to invest heavily in a single stock or mutual fund or a small number of stocks, fail to diversify investments, or to borrow money from the brokerage on margin. These cases may also involve an investor's money being put in a risky investment when the investor's portfolio, age or financial situation makes the risky investment unsuitable.

Failure to Diversify Sometimes similar to unsuitability cases, a failure to diversify claim often involves a situation where a client is advised to hold a high concentration of investments in a single security or sector. This can sometimes arise when a client is advised to hold a large concentration in stock of the company that employs them, either through exercise stock options or employee stock purchase programs.

Negligence A stockbroker has a duty to manage accounts and carry out customer instructions with reasonable care. When they do not, and this leads to financial harm to the customers, this can give rise to claims.

Bad advice on tax-sheltered investments Though this category really is covered under Unsuitability and Negligence, it is something that we see a lot of. We have seen some very egregious situations where clients have been advised to invest in annuities or IRAs that are not reasonably going to further their investment objectives, meet their needs, or improve their tax situation. These cases can involve tying up assets of elderly clients in illiquid annuities, or even “churning” in the form of moving assets from one investment to another that seems to benefit no one but the broker, who makes a sizable commission.

If you have been a victim of any of these improper actions, or believe that your broker or investment advisor has taken advantage of you, please contact us for help.We have the experience you need to prosecute these consumer claims.

Contingent Fees available on most matters

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