Investors

Investors have every reason today to question the advice they have received over the past few years from their brokers. What appeared to be the strength of the U.S. securities markets in the late nineties and into the new millennium was in large part due to some of the largest investment frauds in U.S. history created by brokerage firms that were once highly regarded, but are now highly suspect. Today, we are still grappling with the mortgage and financial crisis that started in 2007 and 2008. As in the past, the laws are constantly changing to meet new situations and approaches to investing. Some new techniques and programs will be legitimate; others will violate new and existing laws. Some will try to take advantage of loopholes and/or will prey on grey areas.

Having successfully represented small to high net worth investors in cases against some of the industry's largest brokerage firms, the lawyers of Malecki Law provide free consultations and representation for investors to determine whether they have been victimized. Malecki Law has helped numerous investors recover tens of millions of dollars in losses and this law office stands ready to represent you in lawsuits and arbitrations involving broker misconduct, fraud, negligence, and more.

Having experience in many forums, our attorneys will appear on your behalf at the following forums to ensure the most advantageous and appropriate jurisdiction to hear that your problem is being utilized:

  • United States Securities and Exchange Commission ("SEC")
  • United States Commodities Futures Trading Commission
  • ("CFTC")
  • Financial Industry Regulatory Authority ("FINRA")
  • New York Stock Exchange ("NYSE")
  • American Stock Exchange ("AMEX")
  • National Futures Association ("NFA")
  • Municipal Securities Rulemaking Board ("MSRB")
  • Certified Financial Planners Board of Standards ("CFP Board")
  • Various State Attorney General Offices
  • Arbitration Forums
  • Mediation Forums
  • Federal Court
  • State Court

Malecki Law will provide legal advice and representation as a plaintiff or claimant in a multiplicity of matters ranging from routine suitability cases to complex disputes involving intricacies in federal securities laws and sophisticated commodities futures trading, including, but not limited to, claims involving:

Common Law Fraud (Scams) & Misrepresentations and Omissions under Federal Securities Laws

The activity above represents violations of specific rules created by state and federal government bodies to protect investors and the markets. Often these concerns involve specific lies a broker has told you or omissions of key facts by a broker making the balance of the information you have received untrue.

Unsuitability

Unsuitability is a broker’s recommendation of investments not appropriate for your age, income, and/or objectives. For more information explicitly defining the legal perimeters of unsuitability, consult the following FINRA rules and regulations:

Overconcentration

Failing to diversify your investments over asset class (type of security, i.e., stock, bond, mutual funds, cash, etc.) and sector (health care, financials, automotive, pharmaceuticals, consumer goods, technology, international, etc.), as well as "overconcentration" in any one of those areas may be the reason for your losses and an actionable claim against your broker.

Elder Fraud and Affinity Fraud

Dealing with senior citizens and those approaching retirement requires special care and planning, as well as generally have special needs of liquidity, income and safety. Knowing that, scurrilous professionals often try to market more speculative products, which have similar features but greater risk (and bigger commissions) to unsuspecting seniors and impending retirees. If you find yourself having experienced greater than expected losses and you are in or approaching retirement, that special care and planning may have been missing and you may have a claim.

Affinity fraud is defined as fraud specifically committed against members of a unified group. Examples include schemes that target the elderly (often within the same community), religious institutions, persons of a particular ethnicity, or professional organizations. Fraud is often committed by one who indoctrinates into the group in question, by convincing community leaders and other members that a crooked investment is legitimate. Many affinity scams involve “Ponzi” or pyramid schemes, wherein new investor money is paid to prior investors, so as to falsely make the investment appear profitable. In actuality, much or all of the money is stolen by the schemer(s).

Sales Practice Violations

A broker’s engagement in fraudulent sales practices, such as high-pressure sales tactics and misrepresentations regarding the nature of the investments or his relationships with company executives.

Churning / Overtrading

Churning refers to the excessive account trading for the broker’s own commissions and/or profit, while exercising control over your money. Control is exercised in situations when an investor is unable to evaluate recommendations and a judgment is made by the broker on the investor’s behalf. Overtrading is essentially the same as churning, but refers to excessive trading that is not necessarily done for the purpose of generating commissions.

Unauthorized Trading

A broker’s trading of your account without asking your permission. A broker may sell your securities without first consulting you if the value of your margin account falls below your firm’s requirements. A broker may also sell your securities without notice if your account agreement dictates that securities may be sold to collect money that you have borrowed.

Breach of Fiduciary Duty

When the broker does not use the high degree of care in handling your investments that you are entitled to, such as recommending junk bonds as safe, or an annuity in an IRA (Individual Retirement Account).

Private Placements, “Hedge Funds”, Limited Partnership Issues & Other Non-Conventional Investments

Investments (often unsuitable and illiquid) that a broker has recommended without disclosing the true nature of the investment, or recommended despite failing to conduct proper “due diligence” on them before investing. Private placements are discrete rounds of investments offered not publicly, but rather made available to selected private investors.

New Products, Defective Securities Products and Structured Products

As we have learned in the last market cycle, some securities products (such as CDOs, CMOs, and MBSs) should never have been sold to most investors. We deal with product failure issues in mutual funds, preferred securities, notes bonds, annuities, hedge funds, private placements, REITs, the aforementioned CDOs, CMOs, MBSs, and other structured products.

Margin Violations

A broker’s failure to properly disclose the risks of margin trading and terms of margin loans.

Failures to Execute

A broker not following a customer's direct instructions in a proper manner.

Failure to Supervise

When the brokerage firm's senior personnel fail to review their brokers' work.

Breach of Contract

A brokerage firm’s failure to live up to written and/or verbal agreements regarding the handling of your account.

Forgery

A broker’s wrongful signature of your name without your permission.

Conversion and Theft

A broker wrongfully taking control of your money, and/or transferring it to an account outside your control.

Market Manipulation

The creation of a fictitious market environment by brokers, traders, and/or analysts to suit only their own profit objectives. “Pump and dump schemes” (otherwise known as “hype and dump manipulation”) refers to the steering of investor toward a stock (typically microcap companies, defined as companies with a market capitalization of $300 million or less) through false or misleading statements. With the stock’s value overstated, the committer of this fraud then sells the stock for large profits. The promotion of such schemes is common to the Internet and telemarketing, often perpetuated by paid promoters looking to gain from false hype. Once the stock is entirely sold off (or “dumped”) by the promoter, its worth plummets at the investor’s peril.

Depending on the claim and the state or forum where it is brought, there may be different statutes of limitations or time limits that a customer has to bring a claim, even in arbitration. If you suspect broker wrongdoing has contributed to investment losses, you should promptly contact an attorney in order to protect your rights.

More Information on Statute Specifics from the North American Securities Administrators Association