SEC Finding Spotlight: May 2020
Many of us place the same level of trust in our brokers that we do in our medical care providers. Understanding the markets and discerning the best way to achieve our financial goals can be incredibly overwhelming. A broker’s expertise can make all the difference when it comes to your financial future and the integrity of your investments. Unfortunately, not all brokers play by the rules. If a broker is not performing his or her job correctly, or if you believe that a broker is engaging in misconduct, there are channels you can use to report him or her. In some cases, however, a broker may go to great lengths to prevent your grievance from reaching the right place. Los Angeles securities lawyer Steve A. Buchwalter is a former broker who has significant insight and experience into the investment world. He is available to help you seek the compensation you may be entitled to.FINRA’s Rules Regarding Customer Complaints
The Financial Industry Regulatory Authority (FINRA) is the body responsible for issuing rules governing broker conduct and enforcing those rules. A recent FINRA enforcement action was undertaken against Los Angeles-area broker Billy Hai Zhang, who was employed with AXA Advisors. According to FINRA, in February 2017 Zhang resolved a customer complaint without providing knowledge of the issue to his employer.
FINRA began investigating this violation after Zhang’s firm filed a disclosure statement indicating that it had suspended Zhang. The investigation determined that in November 2016, Zhang received a written complaint from one of his customers. The customer was unhappy about the use of proceeds from a partial redemption of a variable life insurance product, which totaled $10,600. According to Zhang, the proceeds were used for the reinstatement of a separate policy which was lapsed as a result of non-payment of premiums. Zhang paid $10,600 to the customer in February 2017 to settle the issue. He did not obtain approval from his firm before making this payment. AXA advisors later terminated Zhang.
Zhang’s conduct was a violation of FINRA Rule 2010, which provides that a broker must observe the highest standards of commercial honor and fair dealing. This means adhering to just and equitable principles of trade. The act of handling a customer complaint without involving or notifying a broker’s firm constituted a failure to follow these principles. A skilled securities attorney serving Los Angeles can review the facts of your case to assess whether a similar violation may have occurred in your situation.Seek the Compensation You Deserve from a Careless Broker
If you were burned by your broker, you can bring a civil claim to recover compensation. If you are successful, you can be awarded compensation in the amount of the difference between the actual value of your account and the estimated value that your account would contain had the broker acted appropriately. Before you can receive compensation, you must show that the broker failed to act with the highest level of fiduciary care in handling your accounts, making decisions about investments, following your investment objectives, and complying with FINRA’s regulations.
Because securities can be complex and difficult to understand, retaining a seasoned Los Angeles securities lawyer with experience working as a broker can be a huge help. Part of establishing your right to compensation involves showing that your account would not have suffered a loss but for the broker’s conduct, for example. Determining the market conditions that were in play at the time the alleged misconduct took place and whether they were the greater cause of financial harm can be incredibly difficult for a layperson.Meet with a Responsive Securities Attorney in Los Angeles
Proudly serving investors throughout Beverly Hills, Pasadena, Malibu, and other areas of Southern California, Attorney Buchwalter offers a free consultation to discuss your situation and whether he can assist you. There is no such thing is a silly question when it comes to exploring your legal rights, especially when you’ve suffered a major financial loss. To schedule a meeting, contact our office today at 818-501-8987 or contact us online to get started.