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Securities Arbitration & Litigation

The nation’s securities laws are so complex and highly technical that experts in the field disagree over whether a particular type of conduct is permitted or prohibited under the law. The attorneys at Schwed Kahle & Kress have decades of experience in agent and broker litigation and professional liability matters, including the most complex securities arbitration and litigation.

Liability of Stockbrokers and Investment Advisors

When a broker is trading or investing on behalf of a client, the broker owes fiduciary duties to the client. This means the relationship is one of trust, and the broker is required to act in good faith and display loyalty and fidelity to the customer by avoiding self-dealing or other conflicts of interest. Brokers and investment advisors can be held liable for unlawful and unethical activity. Brokerage firms for their part should supervise their brokers, review trades and investigate suspicious activity. Brokerage firms can be liable for their negligent supervision of brokers.

Common Broker-Dealer Disputes

Investment professionals may be either brokers or dealers, depending on whether they are executing orders on the client’s behalf or trading in their own accounts. Different clients have different levels of sophistication regarding investments, and risk tolerance and goals are unique to each investor. Some investors rely heavily on their broker’s expertise. Some clients initiate and approve trades, while others set goals, parameters and standing orders for the broker to follow. The goal (and duty) of the broker is to maximize the investor’s return within the client’s risk tolerance and overall goals.

Common claims laid against stockbrokers and investment advisors include:

  • Excessive trading (churning) in an account to generate commissions for the broker rather than to further the goals of the investor
  • Unsuitable investments given the investor’s goals, age and needs
  • Failure to diversify investments
  • Unauthorized trading
  • Negligence
  • Misrepresentation
  • Omissions
  • Fraud

Securities Arbitration

Private arbitration is often the venue used to resolve securities litigation. Arbitration of disputes (as opposed to going to court) is required by most contracts drafted by the securities industry and used between brokers and investors. Also, parties can agree to arbitrate claims, and National Association of Securities Dealers (NASD) rules require arbitration if requested by the client.

An arbitration may be conducted by one arbitrator or a panel of three, most often led by a veteran of the securities industry but also possibly including lawyers or accountants on the panel. Securities arbitrators have a great deal of knowledge and experience in the industry, so litigation before an arbitrator is frequently cheaper and quicker than going through the effort of preparing a complex securities matter for a judge or jury to decide. Arbitration is seen as favored by the industry, however, and statistics show individual investors fare much better when represented by an experienced securities attorney in arbitration or litigation.

Experienced Florida Business Law Attorneys for Securities Arbitration and Litigation

For strategic advice and effective representation in securities arbitration and litigation in Florida, contact Schwed Kahle & Kress to speak with an experienced securities litigation attorney, with offices in Palm Beach, Miami, Tampa, Orlando, Jacksonville and Tallahassee.

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