If you have a dispute with your broker, your claim will be handled through the FINRA arbitration process. This is separate from FINRA’s enforcement activities. In other words, if you simply file a complaint with FINRA, that will likely not be sufficient to secure a recovery of your lost investment. Rather, you will likely need to retain a Minnesota broker fraud attorney like Mark C. Santi to assist you with your claims.

According to FINRA, the ten most common claims for 2023 as follows in descending order:

Breach of Fiduciary Duty

Fiduciary duties represent a very high standard of care that investment professionals must adhere to such as the duty of care, duty to act in good faith, and duty to avoid self-dealing.

Negligence

You have a negligence claim if your broker fails to comply with industry standards or fails to act as a reasonably prudent broker would under the circumstances of your case.

Failure to Supervise

A brokerage firm has a responsibility to supervise its brokers. This is especially true if the broker has a record of prior misconduct or is on “heightened supervision.” You may have a securities claim if you suffered losses as the result of your brokerage firm’s failure to supervise its broker. You can research your broker’s professional background at http://www.finra.org/Investors/ToolsCalculators/BrokerCheck/

Breach of Contract

You almost certainly entered into a Customer Agreement (or a document bearing a similar name) that requires the broker to comply with the rules of exchanges on which the broker trades. Thus, if your broker violated industry rules, or failed to adhere to the implied covenant of good faith and fair dealing in all Minnesota contracts, you may have a claim for breach of contract.

Misrepresentation

Your broker has an obligation to tell you the truth and to avoid misleading you. If your broker fails to do so, you can assert a claim for misrepresentation.

Unsuitability

Brokers are obligated to ‘know their customer’ and to only make recommendations that are suitable. For example, brokers are required to obtain information from you regarding your financial status, tax status, investment objectives, and other information that would reasonably be required when the broker recommends the trade.

Omission of Facts

Failure to disclose information involving a security may give rise to a claim for omission of facts.

Fraud

Fraud occurs when your broker makes a misrepresentation of a material fact which induces you to take an action, or inaction, that results in damages.

Breach of Regulation BI

As stated by the SEC, Regulation BI establishes “a "best interest" standard of conduct for broker-dealers and associated persons when they make a recommendation to a retail customer of any securities transaction or investment strategy involving securities, including recommendations of types of accounts.”

Violation of Blue Sky Laws

Each state, including Minnesota, has enacted regulations to protect investors from investment fraud.

If your broker has committed any of the above infractions, or others, please contact Minnesota stock broker fraud attorney Mark Santi of Santi Cerny, PLLC at 612-808-9082.