When Can Your Financial Professional’s Employer Be Held Liable For Your Investment Losses?

Liability for your investment losses may not be solely limited to your financial advisor. Your brokerage firm, his or her employer, may also potentially be legally responsible for their misconduct. First and foremost, brokerage firms can be held legally liable for their own negligence. In some cases, an employer’s negligence will be a key factor that allows an individual financial advisor to commit fraud.

Many financial frauds begin and operate due to the lack of oversight and supervision of financial professionals. Firms that employ financial professionals are required to follow strict supervision guidelines set by Federal and State agencies as well as the financial industry’s own governing body known as the Financial Industry Regulatory Authority (FINRA). FINRA writes and enforces the rules governing the ethical activities of all registered broker-dealer firms and registered brokers in the United States. While you may be able to file a claim for losses in Court, FINRA allows investors to arbitrate and mediate claims against your investment advisor or his/her employer through their Dispute Resolution Services. One of the most helpful functions of FINRA is Broker Check, where any investor can look up an investment professional and learn whether they have been disciplined or had other claims filed against them.

Whether you file a claim for investment losses in Court or with FINRA, the process is complex and you can expect that the defendant (a brokerage firm and an advisor) will fight back aggressively. Typically, an investor will have a valid claim against both the individual advisor and the investment firm/employer at the same time. To get started in the claims process, you first need to know who exactly you should bring a claim against. We can help. If you suspect you have been a victim of investment fraud, contact the North Carolina investment fraud lawyers at the law firm of Hemmings & Stevens, PLLC today. We offer free initial consultations and work on a contingent fee basis, which means there are no fees unless we make a recovery for you. You can call us at 919.277.0161 or contact us online . Our office is in Raleigh, but we handle investment fraud cases statewide.