Recognized in the Industry
Badge - AV Preeminent 2020
Badge - Best Attorneys of America
Super Lawyers
Badge - Badge - Avvo Rating 10.0 Top Attorney
Martindale-Hubbell Client Reviewed
Expertise - Best Employment Lawyers in New York City
Avvo Reviews
NYC Bar Association

Tennessee

Tennessee, famously home of Nashville and Memphis, has always drawn fans of art and music to its vibrant scene. Like other affluent centers of gathering, these cities also draw people with wealth. And where there is wealth, fraudsters are always lurking. Retail investors and retirees rely on financial firms to not only grow their wealth, but to protect it through vigilant oversight. For retirees, it can be devastating when they lose their nest egg either due to fraud or negligent management by a financial professional – in either case, proper oversight and controls by the financial firm can prevent most misconduct.

For over 25 years, the stock market loss attorneys at Malecki Law have been bringing successful actions, recovering tens of millions of dollars on behalf of investors against the nation’s largest financial firms for losses caused to investors through the firm’s lack of supervision. The Tennessee Securities Division

is the state agency responsible for the protection of Tennessee investors, and it has brought numerous regulatory actions against financial firms that have failed to follow industry rules regarding supervision. One example of this lax oversight is from the Division’s consent order against LPL Financial LLC, in which it fined LPL for nearly $500,000, including a recent March 2022 enforcement action for $640 million against Robinhood Financial that “addresses Robinhood’s lack of supervision when approving option or margin trading customer accounts.” As reflected in the settlement, Robinhood’s failures affected at least 40 Vermont customers who reported outages with their mobile app that prevented them from being able to execute trades.

Additionally: “The settlement Tennessee Securities Division for LPL Financial LLC.

For over 25 years, the investment loss attorneys at Malecki Law have been bringing successful actions, recovering tens of millions of dollars on behalf of investors against financial firms like Robinhood, Merrill Lynch, Morgan Stanley, and other well-known players in the industry, for losses caused to investors through the firm’s lack of supervision. The Vermont Department of Financial Regulation (DFR) is the state agency responsible for the protection of Vermonter investors in banking, securities (investments), insurance, and other financial related areas. DFT has brought numerous regulatory actions against financial firms that have failed to follow industry rules, including a recent March 2022 enforcement action for $640 million against Robinhood Financial that “addresses Robinhood’s lack of supervision when approving option or margin trading customer accounts.” As reflected in the settlement, Robinhood’s failures affected at least 40 Vermont customers who reported outages with their mobile app that prevented them from being able to execute trades.

Additionally:

“The settlement also reflects the Department’s finding that Robinhood’s wholly automated process was inadequate to determine which investors should be approved for high level option and margin trading. Option and margin accounts present increased financial risk and should be reserved for experienced traders. Applicants for margin- and options-enabled accounts were required to answer questions about their financial situation and experience. Their answers and user profile were then autonomously compared to the company’s minimum requirements. Much of the self-reported information was not subject to verification and rejected applicants could reapply immediately and be accepted by changing their answers.”

Robinhood clearly put many of its investors in danger, allowing options and margin trading for many new investors who have little understanding of their risks.

But no matter how much money investors seem to lose to firms who fail to properly supervise their systems and accounts, regulatory actions alone still leave many investor victims out of pocket, rarely making them whole. For this reason alone, it is important for any investor who has been defrauded or misled in the financial markets to not solely rely on the success of a regulatory action, which can take years if seen through to completion at all, but to also consider bringing a parallel civil lawsuit against the firm that should have been keeping a close eye on your account. It is, thus, important to hire counsel from an experienced, investment loss law firm like Malecki Law, whose investment loss lawyers are familiar with how financial firms operate, as well as knowledgeable about the supervision rules they must abide by.

Brokerage and other financial firms have a legal obligation to supervise their employees, systems, and accounts, as spelled out, for example, in FINRA Supervision Rule 3111(a), which states:

“Each member shall establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA rules. Final responsibility for proper supervision shall rest with the member.”

The italicized emphasis is added to denote the affirmativeobligation that these firms have when faced with a lawsuit alleging a failure to supervise – it is the firm that has the burden to prove it had supervisory controls in place. This makes sense because it would otherwise be close to impossible for any investor to prove the absence of something, other than pointing to the losses in their account statements.

If you are a Vermont resident and believe your account was mismanaged or believe that your broker caused losses in your account, you should contact the investment loss attorneys at Malecki Law for a free initial consultation. Our attorneys always ensure that investors are properly represented in accordance with state rules. We have litigated numerous lawsuits alleging failure to supervise in federal and state court, as well as in FINRA Arbitration, the forum where most retail investors are required to resolve their disputes. We know how to navigate these forums and what documents to seek from a financial firm to prove that an account was not properly supervised. Our results speak for themselves.

Attorney Advertisement. Prior results do not guarantee a similar outcome.

Testimonials From Former Clients
★★★★★
I highly recommend Jenice and her team at Malecki Law. I had a challenging, and lengthly case. Jenice was professional, very knowledgeable, and a pleasure to work with. She managed to make the process far less stressful during a very difficult time. They care about their clients, and it definitely shows. Mario
★★★★★
Jenice is truly a miracle worker and one of the top securities lawyers. She handled a very difficult case for us, displaying her legal knowledge, intelligence, and savviness throughout the process. I cannot recommend her enough. The quality of work from her team rivals that of corporate law firms. She was always available, extremely professional, and made sure to know all the details of the case. We were very fortunate to have been referred to Jenice and highly recommend her for any securities related legal issues. Nathan A.
★★★★★
An excellent professional who represented us in trial regarding a bank fraud, an unexpected and difficult time. A professional that worked hard, persevering and who stood toe to toe against firms that had a team of excellent lawyers backing them up. Her unflinching determination really stands out, it makes you feel you have someone who really cares about trying to recover what you lost from the people that wronged you. Salomon Levi
★★★★★
It is difficult to thank you in words when gratitude comes from the heart, so I will try to link feelings with writing. It is essential for us to mention your excellence as a professional, your aptitude on legal fields, and your unavoidable persistence. All of these virtues that elevate the profession you exercise in such an admirable way, go hand in hand with your sense of ethics, your human warmth and the transparency in your actions. To sum up, thank you for being a listening ear and for having the right word while transmitting information about the legal process. Having you as our representative during such an adverse situation was a privilege and enough reason for our eternal gratitude. Angeles Aparain
★★★★★
To say that my securities litigation was complex would be a severe understatement. With multiple parties involved and spanning many years, trying to understand the issues was daunting to say the least. Jenice and her team broke down the transactions by segment and by party uncovering every hidden expense. In the end, I was more than happy and could not thank Jenice and her team enough. I would not hesitate to recommend Jenice to anyone. She is highly professional, incredibly knowledgeable, well connected to industry experts, has a tireless work ethic and is so pleasant and easy to communicate with. Five stars for sure! Andrew Loughrane