Suing Your Stockbroker or Investment Advisor

Suing Your Stockbroker or Investment Advisor | Securities Arbitration Lawyers

Discovering that you have suffered significant financial losses due to the actions of a trusted stockbroker or investment advisor can be a devastating experience. You may feel betrayed, confused, and unsure of your options. At Iorio Law PLLC, we want you to know that you have rights, and there is a defined legal path to recover losses caused by broker misconduct.

As a national securities arbitration law firm, we have seen firsthand how crucial it is to hold financial professionals accountable. Our experienced attorneys are dedicated to helping investors navigate this complex process and fight for the compensation they deserve.

This guide provides essential information on how and when you can sue your stockbroker or financial advisor to recover investment losses.

Can You Sue Your Broker? Understanding the FINRA Arbitration Process

When you open a brokerage account, you almost always sign an agreement stating that any dispute will be resolved through a process called FINRA arbitration, not in a traditional court of law.

FINRA (Financial Industry Regulatory Authority) is an independent, non-governmental organization that writes and enforces the rules governing registered brokers and brokerage firms. Its arbitration forum is a specialized legal venue designed to handle investor complaints. Our firm pursues FINRA arbitration claims nationwide to help investors recover financial losses resulting from wrongful conduct by financial advisors and brokerage firms.

Can You Sue Your Investment Advisor?

In contrast to broker-dealers that sell securities, Registered Investment Advisers (RIAs) provide investment advice.  When you begin a relationship with an RIA firm, you often sign a client agreement. The terms of that client agreement will determine your legal recourse.

If the advisory agreement contains an arbitration clause or another alternative dispute resolution mechanism, then you must proceed with the dispute resolution process outlined in the agreement. If there are no such clauses, then you can sue your advisor by filing a lawsuit in the appropriate jurisdiction.

Understanding whether your case belongs in arbitration or court is critical—our experienced securities arbitration attorneys can review your agreement and help you determine the proper forum.

Common Grounds for a Claim Against Your Broker or Advisor

While every case is unique, most investor claims are based on a breach of the duties your broker owes you. Using a tool like FINRA’s BrokerCheck can often reveal red flags in a broker’s history. Many of the “disclosures” found in these reports form the basis for legal action.

Common examples of broker misconduct that can lead to a successful claim include:

• Unsuitable Investment Recommendations: Brokers have a duty to recommend only those investments that are suitable for your age, financial situation, risk tolerance, and investment goals.
• Misrepresentation and Omission: Your advisor must not misrepresent material facts about an investment or omit information that a reasonable investor would need to make an informed decision.
• Breach of Fiduciary Duty: Some advisors are held to a higher “fiduciary” standard, legally obligating them to act in your absolute best interest at all times.
• Unauthorized Trading: Your broker cannot buy or sell securities in your account without your express permission unless you have provided written discretionary authority.
• Market Manipulation: This occurs when a firm’s actions unfairly influence market prices. For example, Robinhood’s “Position Closing Only” restrictions in January 2021 resulted in manipulated stock prices and unfair markets for retail investors.
• Churning (Excessive Trading): A broker excessively buys and sells securities in your account primarily to generate commissions for themselves, not to benefit you.
• Failure to Supervise: Brokerage firms have a duty to properly supervise their advisors. They can be held liable if one of their brokers harms an investor.

Why Choose Iorio Law PLLC for Your FINRA Arbitration Claim?

Navigating a FINRA arbitration claim requires deep expertise in securities law and regulations. Choosing the right legal partner is critical.

• A Proven Track Record of Success: Our firm has helped investors recover nearly $100 million in over 700 cases. We have a history of taking on the largest brokerage firms and winning.
• Landmark Victories: In 2022, firm founder August M. Iorio secured the nation’s first FINRA arbitration award against Robinhood for its controversial January 2021 trading restrictions, paving the way for other investors to seek justice.
• No Upfront Legal Fees: We handle securities arbitration cases on a contingency-fee basis. This means there are no out-of-pocket fees or costs to you—we only get paid if we successfully recover money for you. Learn how we are paid for securities arbitration claims.

Frequently Asked Questions (FAQ)

Q: How do I know if my losses were from market risk or actual misconduct?

A: This is the critical question. While all investments carry risk, losses caused by a broker recommending unsuitable products, misrepresenting facts, or breaking industry rules may be recoverable. Our experienced attorneys can evaluate your situation for free to determine if you have grounds for a claim.

Q: How much does it cost to hire your firm?

A: There are no upfront legal fees. We handle cases on a contingency fee basis, meaning you owe us nothing unless we obtain a recovery for you.

Q: My brokerage agreement has an arbitration clause. Does that mean I can’t sue?

A: It means your legal action will take place through FINRA arbitration rather than a court. Our law firm specializes specifically in representing investors in the FINRA arbitration forum.

Take the First Step to Recover Your Losses

If you suspect your financial advisor’s wrongful conduct caused you to lose money, don’t wait. Contact the experienced securities arbitration attorneys at Iorio Law PLLC today for a free, confidential consultation.

• 📞 Call Now: (646) 330-4624
• 📧 Email: info@iorio.law
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Disclaimer: This information is for educational purposes only and does not constitute legal advice. Past results do not guarantee future outcomes.