Investor Representation Attorney in Dallas, Texas Serving Nationwide
At Simms Law, P.C., one of our primary focuses is on the representation of investors. The financial markets exist in a complex arena and those who participate can potentially gain or lose a great deal, both monetarily and reputationally. Simms Law, P.C. assists investors in a number of ways. We always take our clients’ concerns seriously and are aware of what is at stake when an investor suffers losses in the financial markets.
Investor Dispute Proceedings
We represent aggrieved investors in arbitration before the Financial Industry Regulatory Authority (FINRA) and in court proceedings. In such cases, the retail investors who seek our counsel have frequently lost money as a result of, among other things, unsuitable investment recommendations and have come to us seeking justice. Most contracts between the investor and broker-dealer require disputes to be arbitrated through FINRA. In this process, a panel of one or three neutral arbitrators (depending on the nature of the case) is selected to hear the case, determine liability, and issue an award. Throughout this process, Simms Law, P.C. represents the investor’s interests zealously. Over the years, we have represented clients in FINRA arbitrations on both sides of the aisle, including some of the largest broker-dealers in the world, and have developed a unique understanding of the varying perspectives at play. We leverage this experience and understanding to our clients’ advantage, to efficiently achieve the best possible result for the investor.
Common Types of Disputes
Of course, virtually all investments contain some degree of risk, and the mere fact that an investment has resulted in losses does not, alone, mean that the investment was unsuitable. However, it is the financial advisor’s duty to accurately represent the risks of a given investment to the customer, gain an understanding of the customer’s “investor profile,” and to only recommend investments that are consistent with a given profile. A customer’s investor profile is comprised of information such as the customer’s age, investment experience, tax status, risk tolerance, liquidity needs, and net worth. FINRA Rule 2111, the “suitability rule,” requires that the financial advisor have a “reasonable basis” to recommend a given investment and that he or she consider the aforementioned information when performing that analysis. If you feel that your financial advisor failed to act in your best interests by failing to properly consider your investor profile in recommending an unsuitable investment, contact Simms Law, P.C. to discuss your situation and options.
Lack of Proper Diversification
Diversify, diversify, diversify. It is a common adage and reflects one of the basic tenets of responsible investing. Diversification is a technique that reduces risk by allocating investments among various financial instruments, industries, and other categories. It aims to maximize return by investing in different areas that would each react differently to the same event. It sounds straightforward enough, but true diversification can be harder to identify than one might think. For example, an investor might have 60% of his portfolio in municipal bonds and 40% in equities. The equities allocation might be further spread across multiple industry sectors (technology, energy, and healthcare, for example) and the municipal bond allocation might be spread across multiple states and territories. At first blush, it might look like a diversified portfolio of investments. But as one drill down further, the equities allocation might be concentrated in stocks from “emerging market” regions outside the U.S. which are typically considered higher risk. Or the municipal bond portfolio, while geographically diverse, may be concentrated in high-risk junk bonds. There can be multiple layers to an investment portfolio, and unsuitable concentration (whether in terms of geography, industry, credit quality, etc.) can be masked at the “30,000-foot view,” from the perspective of most retail investors. Every broker and financial advisor should understand the importance of diversification. If you are concerned about the allocation of your investment portfolio, and the effect that it has had on your portfolio’s performance, contact Simms Law, P.C. now.
Fraud and Misrepresentation
Unfortunately, modern securities fraud has been a part of the U.S. financial system since the advent of the stock market. For the retail investor, securities fraud typically occurs when a broker or financial advisor misrepresents, or omits material facts about, the risks and key characteristics of an investment, causing the investor to purchase unsuitable security. Particularly at risk is the unsophisticated investor who lacks the knowledge and experience to identify potentially fraudulent behavior. Some common signs include investment recommendations made by your broker or financial advisor without him or her explaining the details of the investment to you, or risky investment recommendations that you did not fully understand or feel comfortable with. Other signs include trades reflected on your account statement that you do not understand or did not authorize, an excessive number of trades reflected on your account statement, unexplained withdrawals from your account, and sudden and/or significant losses. If you suspect that any suspicious activity has occurred in your investment account, or that you have been misled about the nature and risks of any of your investments, contact Simms Law, P.C. for a free consultation.
Come to Simms Law, P.C. for Experienced Investor Representation
If you are an investor in need of legal representation, Simms Law, P.C. is here to assist you in numerous ways. We are well-prepared to prosecute your claim for:
Lack of diversification
Negligence, breach of fiduciary duty, and fraud
Churning (making excessive trades to generate multiple commissions)
Broker-dealer’s failure to adequately supervise its financial advisor, including the failure to review customer account activity and investigate any suspicious actions
Selling away, i.e. when a financial advisor recommends an investment that is not part of his or her firm’s platform of approved products
Simms Law, P.C. is available to assist investors nationwide. We are here to provide you with uncompromising legal support. Please get in touch with us by phone or by filling out one of the convenient contact forms on our website.