Questions & Answers

We begin to answer that question in the very first phone call or email you send to us. We will ask you a series of questions relating to your background and the circumstances surrounding the sale of the investment. Our interviews are always in strict confidence and are covered by the attorney client privilege. If we believe you might have a claim after the interview, we will need to review the documents you have related to your investment. After we do that, we will have a pretty good idea on whether you have a claim, but we may need to do some additional research and analysis. We can usually give you an answer within a week of talking to you and getting your materials. If we believe you have a claim, then the odds are good that you will get a recovery. While we usually are not able to recover 100% of your investment loss, it is rare that we do not recover losses for our clients. The reason for our high success rate is not only that we are good lawyers, but also because we know how to evaluate cases. If we don’t think your case has merit, we will tell you and won’t waste your time or ours to pursue it. On the other hand, if we accept your case, the chances are very good for a successful outcome.

We have clients throughout the country. When we have a case that has to be filed in a forum where we are not admitted to practice and are required to have local counsel, we associate with local counsel. We know and have worked with lawyers throughout the country.

Every case is unique but there are some guidelines we can offer. If you have a FINRA securities arbitration case, those cases are generally scheduled for final hearing within 12-15 months from the day we file them. More than half of our cases settle before the final hearing, and those cases are over sooner. Settlements can occur in a matter of weeks or can be the day before a hearing. Court cases follow a similar pattern, but it does depend on the court where your case is filed. For state court cases in Oregon, trials usually occur within 12-14 months of filing. Federal courts take a little longer. In other sates cases can be slower to resolve because the courts there have dockets that are more backlogged. For investors who are facing a financial crisis as a result of their losses, there are procedures that we can sometimes use to expedite the case.

When you sign paperwork to open an account at a brokerage firm, you almost always agree (whether you realize it or not) to resolve any disputes with your broker in arbitration, rather than in a court of law. This means you’ll pursue your case in a private, binding dispute resolution process. Typically, three appointed arbitrators decide your case. We are very involved in selecting who they will be. Those arbitrators then act as both judge and jury and hear evidence in much the same way that happens in court. The lawyers present opening statements, call witnesses, make objections, offer exhibits and make closing arguments. Then, the arbitrators meet and decide the outcome of the case. Unlike court, the proceedings generally occur in a hotel conference room, and are not open to the public. And, unlike court, there are only very limited rights of appeal. Most likely, if you win in arbitration, your case is over. We prefer arbitration for most of our brokerage cases. The reasons are that it is less expensive for our clients, since there are not deposition costs, no appeals, and almost never a motion to dismiss your claim. And, because we helped write the FINRA arbitration rules, we are experts in using them to their fullest advantage for our clients. The other major advantage of FINRA is that, when an investor wins, the losing party has to pay within 30 days, or FINRA will suspend their license. That does not happen in a court victory, and is a major advantage for investors.

FINRA arbitration is a dispute resolution process run by the Financial Industry Regulatory Authority. When investors opens accounts at a brokerage firm, they sign a new account agreement that includes a provision that states that the investor agrees to waive their rights to go to court and instead go to arbitration. Even though most investors are unaware that they have made such an agreement, those clauses are enforceable under the law. As a result, we file almost all of our investor claims against securities industry members in FINRA arbitration. That process involves preparing a statement of claim making out the basis for the claims, and filing it with FINRA. The financial adviser and/or brokerage firm that is the defendant, or respondent in arbitration, then files its answer, admitting or, more commonly, denying the facts described in the claim. We then choose three arbitrators from a list of 30 after careful review of their backgrounds. The parties to the case exchange documents according to FINRA rules, and the case is then set for an arbitration. If the case does not settle during the process (and about 75% of them do), it proceeds to an arbitration hearing that is conducted much like a court trial, only it is before 3 arbitrators instead of a judge and jury. The lawyers make opening and closing statements, call and cross examine witnesses, and make objections much as they would in court. The hearings typically last between 3 and 7 days. The arbitrators then issue an award, and except in very rare circumstances usually involving fraud on the part of an arbitrator, the award is not subject to appeal. FINRA arbitration is generally quicker and less expensive than court. For that reason, and because we know the rules so well, we like the forum. Another good thing about FINRA arbitration is that if a broker or brokerage firm does not pay an award within thirty days, their license is suspended, which provides a powerful incentive for them to pay that does not exist

All fifty states do have financial regulatory agencies. In Oregon, its name is the Division of Financial Regulation (DFR), which oversees the financial and insurance industries in Oregon. In the state of Washington, its name is the Securities Division of the Department of Financial Institutions. We consider these state organizations good partners in the fight for investor rights and education, and the fight against misrepresentation and fraud. Investors may submit complaints against a financial professional to these state regulatory agencies. But realize that recovering money for investors is not part of their mission. While the state agencies play a vital role in financial regulation, the benefit to investors — taking bad actors out of commission, enforcing standards, licensing, inspection, oversight – is usually indirect. They perform the critical function of stopping bad actors from victimizing others. Importantly, the state agencies are not your “attorney.” Communications with state agencies do not have an attorney-client privilege. And, just by submitting a complaint to the state agency (or to FINRA or the SEC), that does not “stop the clock” on applicable statutes of limitations that create legal deadlines for filing a securities claim in a court of law or through arbitration. We work with state agencies frequently to help identify bad actors in the community and protect the public. But to protect YOUR legal rights, you should consult with a securities attorney who would be representing YOU, and your interests, in potentially pursuing claims to recover your investment losses.

Absolutely not. We have seen too many times where our client’s attempt to resolve the problem has actually made things worse. There are several reasons for this. One is that such letters can create defenses to your claim that would not otherwise exist. The letters can have an effect on statutes of limitation. And, frequently, our clients, no matter how sophisticated, do not understand the legal elements of their claims. They can leave something out that will be used against them later, or their words can be misconstrued and turned against them in a hearing down the road. After you speak with us, we may advise you to write to your broker, but we would not allow you to send a letter without our prior review and approval.

Securities regulators are concerned first and foremost with policing the purchase and sale of securities. They can suspend and revoke licenses, impose fines and send bad actors to jail. They can also require violators to repay their victims, but the simple fact is that investors very rarely recover their losses as a result of a regulatory complaint. Too many times our clients have made complaints to the state or FINRA, believing that they need not take any further action. While they are waiting for a decision or action, which can take years, the statute of limitations on their claims runs, or the bad guys vanish, and they have no claim to pursue. If we believe you have a good chance to recover your money as a result of a regulator’s actions, we will tell you that. We are honest with our clients. But, it almost never happens.

Sometimes, it is. If you went to an adviser in 1998 and said that you wanted to invest all of your account in technology companies, and you lost money in the tech crash of 2000, then the market certainly played a substantial role in your loss. However, portfolio management is a science. Nobel prizes are awarded in the field. Through appropriate asset allocation and diversification within asset classes, your investment results can and should be controlled over time in accordance with your investment objectives, time horizons and risk tolerance levels. A couple nearing retirement with moderate risk tolerance and $1 million to invest should never lose $500,000 in a stock market downturn because their investments in the stock market should be limited to prevent such losses. Likewise, an investor who needs income and possible return of principal to pay future medical expenses should not have virtually all of their investments in non-traded private investments that cannot be sold at will in the public markets. The bottom line is that investors should question if their adviser is telling the truth if he or she blames all of their losses on poor market performance.