Most investors are unaware that the paperwork they sign upon opening a brokerage account requires them to resolve most, if not all, of their claims, not in court, but in arbitration, typically before the National Association of Securities Dealers, Inc. (NASD), the American Arbitration Association (AAA), or the New York Stock Exchange (NYSE).

Depending on the size of your claim, your case will usually be decided by one or three arbitrators. Have you investments been mishandled by your broker? Contact our NASD arbitration attorneys.

Causes for NASD arbitration may include:

Lack of fair dealing – Brokers’ sales efforts must viewed as ethnical and fair. Sales efforts must be judged on the basis of whether they can reasonably represent fair treatment for the persons to whom the sales efforts are directed, rather than on the argument that they result in profits to customers.

Recommending speculative low-priced securities - Recommending speculative low-priced securities to customers without knowledge of or attempt to obtain information concerning the customers' other securities holdings, their financial situation, and other necessary data. This involves a high probability that the recommendation will not always be suitable and most likely involves high pressure telephone sales campaigns.

Excessive trading activity (churning or overtrading) - Excessiveness activity in customer accounts unrelated to the objectives and financial situation of the customer involved.

Trading in mutual fund shares - Trading in mutual fund shares, particularly on a short-term basis. Mutual fund shares are not proper trading vehicles and such activity on its face may raise questions of violation.

Fraudulent activities - such as establishing fictitious accounts to execute transactions that otherwise would be prohibited; transactions of discretionary accounts in excess of or without actual customer authority; unauthorized transactions
 
Misuse of customers' funds or securities – by forgery, non-disclosure, manipulation, deception

Recommend purchases beyond customer capability - Recommending the purchase of securities or the continuing purchase of securities in amounts which are inconsistent with the reasonable expectation that the customer has the financial ability to meet such a commitment.

Fair dealing in regard to new financial products – Brokers have obligations for fair dealing with customers when making recommendations or accepting orders for new financial products. As new products are introduced from time to time, it is important that brokers make every effort to familiarize themselves with each customer's financial situation, trading experience, and ability to meet the risks involved with such products and to make every effort to make customers aware of the pertinent information (including risks) regarding the products.

If you note any suspicious activity in your brokerage accounts or feel that you have been mislead or have received improper investment advice, contact a NASD lawyer immediately. NASD arbitrations are on a contingency fee basis.