Securities FAQ

Herbert E. Pounds Jr., P.C.
Securities Fraud – Broker Misconduct

Frequently Asked Questions

If I suspect wrongdoing, can I negotiate with the brokerage firm directly?

Of course you can, but it is usually not advisable. Generally, you are at a huge disadvantage trying to work something out with the broker or his firm. However, depending upon filing issues, I encourage my clients to try this method. Most of the time they become discouraged with not only the process, but the lack of meaningful results. You are usually much better off consulting a qualified attorney to deal with the brokerage firm at a very early stage.

How do you evaluate which cases you will take?

Each case is different. If it appears that there has been broker misconduct, we then look at the investor’s age, health, and investment experience, as well as the amount of the loss as it relates to the investor’s net worth. We also look at the solvency of the broker and the broker-dealer. There is no charge for an initial case evaluation.

Can I file the claim myself without an attorney?

Yes. You can file your claim directly with FINRA at http://www.finra.org/ArbitrationMediation/StartanArbitrationorMediation/MaterialstoInitiateanArbitrationClaim/index.htm. There are simplified arbitration procedures for FINRA claims under $25,000.00, which may be cost effective on smaller claims.In these smaller claims, unless the customer requests a hearing, the case will be decided upon the written submissions of the parties. However, keep in mind that even in the smaller cases you will be at a distinct disadvantage when presenting complex legal arguments without the benefit of counsel. In a larger case you will go going against large “in house” legal departments and large, outside law firms. You will be at a clear disadvantage in working against highly trained and experienced professionals, who know how the system works. In most cases, it is advisable to consult with an attorney and have the attorney represent you in presenting your claim.

What are the costs involved in arbitration?

No two cases or sets of circumstances are exactly the same, therefore our fee arrangements differ on a case by case basis. However, it is fair to say that most of our cases are handled on a contingent fee basis (percentage of the actual recovery). If the client does not recover, then there are no legal fees. However, the client does generally fund expenses and costs, such as the initial loss analysis, filing fees, and hearing session deposit. These costs are generally paid up front. Other costs are generally paid on an as-you-go basis, and only if they are necessary. They may include mediation fees, expert witness fees, travel expenses, and session fees for the final hearing. We will give you an estimate of the costs associated with your arbitration depending upon the complexity of your case and the amount of the loss. Our experience is that in most cases, these costs and expenses are less than they would be for litigation.

Are there time limitations on filing a claim?

Yes. The sooner you file a claim the better. There are filing eligibility rules at FINRA (formerly NASD) that allows the filing of claims for six years, but there may be state statutes of limitation that shorten that period.

Are cases mediated prior to the actual arbitration?

Although mediation is totally voluntary, it is highly encouraged by FINRA. Mediation is a process whereby a qualified independent third party attempts to facilitate a settlement between the adverse parties. The mediator is usually a lawyer, but the adverse parties must agree on the selection of the particular mediator. A mediation usually occurs within a couple of months prior to the arbitration, and the parties and their respective attorneys attend the mediation. The mediator’s role is to attempt to resolve the conflict between the adverse parties, but there is no requirement that any party settle at the mediation. All information divulged to the mediator is confidential, and the settlement discussions cannot be used at the arbitration, if the mediation is unsuccessful.

Do many cases settle prior to the actual arbitration?

Yes. About 55-65% of the case settle through direct negotiations between the parties or by mediation. Of the remaining cases approximately, 20-25% of the cases are decided by the arbitrators. The remaining cases are withdrawn or disposed of by other methods. FINRA regularly publishes its Dispute Resolution Statistics on its website:http://www.finra.org/ArbitrationMediation/FINRADisputeResolution/Statistics/index.htm

How long does the arbitration process take from start to finish?

The time period for arbitration is generally much faster than going to court. In our experience, from the time the arbitration is filed until a settlement or award is usually 12-15 months.

What happens at the arbitration and where is it held?

Arbitration is similar to a trial, except that you have a panel of one to three arbitrators instead of a judge or jury. In a more informal setting, they hear the evidence and the arguments from both sides and they then decide the case. The decision is binding, generally final and very difficult to overturn. The FINRA hearing sites in Texas are currently Dallas and Houston.

If I win at the arbitration, how long does it take to get my money from the brokerage firm?
Brokers and FINRA member firms must pay arbitration awards within 30 days of receipt, unless a motion to vacate is filed in court. Under the rules of FINRA, the membership or registration of a broker or broker-dealer can be suspended or canceled if the member does not comply with an arbitration award. Bear in mind that if your broker or brokerage firm goes out of business or declares bankruptcy, you might not be able to recover your money-even if the arbitration panel rules in your favor, however, your attorney usually takes this into consideration prior to accepting the case.

Contacting Our San Antonio Office for Help
When you contact Herbert E. Pounds Jr., P.C., you will receive a full analysis of your case.  With over thirty years of experience, attorney Pounds understands the importance of receiving a return on your investment, and the strategies needed to make it happen if you have been victimized by fraud or misconduct.  Contact a skilled Texas securities fraud lawyer today for an immediate review of your situation. 

Your Initial Consultation is Free of Charge

Contact Us Today

Herbert E. Pounds Jr., P.C.

17890 Blanco Road, Suite 100
San Antonio, TX 78232 – 1031
Phone: (210) 492 – 7627
Fax: (210) 492 – 2915

Located in San Antonio, TX, lawyer Herbert E. Pounds serves clients throughout Texas, including the communities of Dallas, Houston, Austin and Corpus Christi.