Reasons for the Act Inspired by the financial meltdown of 2007-2010 Home market collapsed: total home equity in US dropped from $13 trillion in 2006 to $8.8 trillion by mid-2008, foreclosures Over 100 mortgage lenders went bankrupt in 2007-08 Money market funds experience mass withdrawals ($144.5 billion in a week, compared to $7.1 prior week) […]
An Outline of the FINRA Arbitration Process For Customer-Broker Disputes
I. General A. Nearly all brokerage firms require retail clients to sign an agreement to have all disputes between them decided in arbitration rather than court. B. About 25 years ago, in Shearson/Am. Express, Inc. v. McMahon, 402 U.S. 220 (1987), the U.S. Supreme Court upheld the validity of arbitration clauses which require clients to […]
Common Forms of Stockbroker Misconduct
By Brian N. Smiley In recent months, the brokerage industry has been the subject of scathing headlines about fraud, corruption and conflicts of interest. The media have reported on abuses ranging from tainted research reports to outright theft by brokers. Investors have lost billions of dollars and confidence in securities markets has plummeted. Happily for […]
10 Ways to Protect Yourself Against Fraud
If you hope to prosper in today’s volatile market and lack the time or skill to choose your investments, you should find an honest, competent professional adviser, but that is easier said than done. Many brokers invest client funds with prudence and skill and put their clients’ interests first, even when inherent market risk brings […]
Top 10 Tips for Dealing With Your Stockbroker in a Bear Market
By Brian N. Smiley If you are going to make money in today’s unpredictable market and don’t have the time or the skill to make your own investment choices, you may have to select a professional advisor to help you. But that is easier said than done. As a group, stockbrokers are no more or […]
Reading and Understanding Brokerage Account Statements
Co-Authored by J. Michael Bishop AAII Journal Every month, individual investors across the country receive brokerage account statements. Many investors find it difficult to understand the information contained in the statements and after a quick review of their account values never look at their statements again. There is, however, a method behind the seeming madness […]
Stockbroker-Customer Disputes: Making a Case for Arbitration
By Brian N. Smiley As the bulls run wild on Wall Street, there is increasing evidence that the nation’s securities markets have also provided a home for vipers. Names of prominent executives and major brokerage houses have appeared under headlines announcing investigations, indictments and plea bargains for insider trading, market manipulation. Conspiracy, and other conduct […]
Limited Partners Face Hidden Risks, Fees
If you own a limited partnership interest, or are considering such an investment, you should be aware of a less-recognized form of investor abuse: limited partnership fraud. Because limited partners do not participate in day-to-day partnership operations and there is no board of directors to review management decisions, the general partner has almost complete control […]
