Wisconsin Broker Fraud Lawyers

Wisconsin has many wealthy enclaves near its cities of Milwaukee and Madison. Investors residing in these areas could be targets for financial fraud, as is typical in other affluent parts of the country. The broker fraud lawyers at Malecki Law are here to assist Wisconsinites who have lost money in the financial markets, whether due to fraud, negligence, or other financial misconduct.

The State of Wisconsin’s Department of Financial Institutions (DFI) published a new release that it had participated in an international crackdown related to the Covid-19 pandemic that had targeted Wisconsin investors, as well as investors in 44 other jurisdictions, including the U.S., Canada, and Mexico. The news release claimed that a joint task force for these jurisdictions had disrupted over 200 fraudulent schemes related to the pandemic. Fraudulent schemes have always existed, but the pandemic surely created additional fertile ground for existing scam artists. And while many investors are solicited to participate in scams over social media or directly to their emails or mobile devices, it is not uncommon for investors to also be duped by their own financial advisor, whether through soliciting fake investments as part of a Ponzi scheme or charging excessive commissions and fees within the account. In recouping lost investment funds, it is, therefore, important to hire a broker fraud attorney who is familiar with the regulatory landscape, and not just a personal injury attorney who does not understand the financial markets or how to deal with large financial institutions.

Malecki Law is a broker fraud law firm with attorneys who are knowledgeable in securities and in bringing successful lawsuits against large financial firms who are required to supervise their financial professionals and the accounts they manage. Investors are unquestionably entitled to rely on these firms to protect their retirement assets. Investment firms have an explicit duty to reasonably detect and prevent misconduct through their supervisory obligations, as required by the state laws of Wisconsin, as well as federal securities laws and rules promulgated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

The SEC, for example, has long been clear that customers of large brokerage firms should be able to expect their holdings to be protected from fraud and that their accounts will be carefully supervised:

“Customers dealing with a securities firm expect, and are entitled to receive, proper treatment and to be protected against fraud and other misconduct, and may properly rely on the firm to provide this protection. Large securities firms generally have established fairly elaborate systems of supervision and internal control, in recognition of customer reliance on the existence of protective safeguards and of the fact that it is to be anticipated that in a large organization some employees may be tempted to engage in improper conduct.”

In the Matter of Reynolds & Col., SEC Broker-Dealer Proceedings, 39 S.E.C. 902, 916 (May 25, 1960).

The SEC, as well as FINRA, also have rules requiring supervision; and, make no mistake, these rules are there for the protection of investors. For example, FINRA’s supervision rule, Rule 3110, 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.”

FINRA Rule 3111 (a). The italicized emphasis is added because it essentially means, when it comes to supervision of an investor’s account, that it is the intention of the regulatory framework that “the buck stops here.”

When financial firms are brought to trial for their misconduct, legal counsel for the investor should understand that these supervision rules create an affirmative obligation on the part of financial firms to prove that an investor’s account was reasonably supervised. The broker fraud lawyers at Malecki Law have extensive experience bringing successful failure to supervise actions against financial firms, especially those with a track record for failing to exercise their supervisory obligations as evidenced by prior censures and fines, which are publicly accessible. When financial firms have been fined or censured, it necessarily puts them on notice for future similar violations. If you are a Wisconsin investor or retiree and have suffered investment losses, you may schedule a free initial consultation with Malecki Law – call us directly (212) 943-1233, or email jenice@maleckilaw.com.