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When to File a Securities Dispute with FINRA: A Guide for Consumers in NC and SC

Navigating the complexities of the financial market can be challenging, and unfortunately, disputes with brokers or financial advisors can arise. If you find yourself in such a situation, understanding when and how to file a securities dispute with the Financial Industry Regulatory Authority (FINRA) is crucial. This blog post will guide you through the process, highlight legitimate claims against financial professionals, and explain why it’s essential to regularly check your statements and confirmations.



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When to File a Securities Dispute with FINRA


Recognizing Legitimate Claims


As a consumer, it's important to understand what constitutes a legitimate claim against a broker or financial advisor. Common reasons to file a securities dispute include:


  1. Fraud or Misrepresentation:

  • If your broker has provided false or misleading information about an investment, you may have a claim for fraud or misrepresentation.

  1. Unsuitable Recommendations:

  • Brokers are required to recommend investments that are suitable for their clients' financial situations and goals. If you receive advice that doesn’t align with your risk tolerance, investment objectives, or financial needs, this might be grounds for a dispute.

  1. Unauthorized Trading:

  • Your broker must have your permission before making trades on your behalf. Unauthorized trading occurs when a broker buys or sells securities without your consent.

  1. Excessive Trading (Churning):

  • Churning involves a broker excessively buying and selling securities to generate commissions. This practice is illegal and can lead to significant financial losses for the investor.

  1. Failure to Disclose Risks:

  • Brokers must fully disclose the risks associated with any investment. If your broker fails to provide this information, leading to unexpected losses, you may have a valid claim.

  1. Negligence:

  • If a broker fails to perform their duties with the required standard of care, resulting in financial harm to you, this may constitute negligence.

The FINRA Dispute Resolution Process


  1. Filing a Claim:

  • To initiate a dispute, you need to file a claim with FINRA. This involves submitting a Statement of Claim, which outlines the facts of your case, the alleged violations, and the damages you seek.

  1. Arbitration vs. Mediation:

  • Arbitration: This is a formal process where a neutral arbitrator hears both sides of the dispute and makes a binding decision.

  • Mediation: A less formal, voluntary process where a mediator helps both parties reach a mutually agreeable resolution. Mediation is non-binding unless an agreement is reached.

  1. The Hearing Process:

  • In arbitration, a hearing is scheduled where both parties can present evidence, call witnesses, and make arguments. The arbitrator then reviews the information and issues a decision.

  1. Decision and Award:

  • The arbitrator's decision, known as an award, is binding and enforceable in court. If you prevail, the award will outline the damages you are entitled to receive.


Importance of Checking Statements and Confirmations

Regularly reviewing your financial statements and trade confirmations is crucial for several reasons:


  1. Early Detection of Issues:

  • Promptly identifying unauthorized trades, discrepancies, or unusual activity can help you address issues before they escalate.

  1. Verification of Transactions:

  • Ensuring that all transactions match your records and understanding the fees and commissions charged can prevent disputes over charges and investment decisions.

  1. Tracking Performance:

  • Monitoring your investments allows you to assess whether your financial goals are being met and if your portfolio aligns with your risk tolerance and investment strategy.


Filing a securities dispute with FINRA can be a complex process, but understanding your rights and recognizing legitimate claims are vital steps in protecting your investments. Regularly reviewing your financial statements and working with experienced legal counsel can help you navigate disputes effectively. For personalized legal assistance with securities disputes in North Carolina and South Carolina, contact Brown & Associates, PLLC.


Contact Us:

Brown & Associates, PLLC Attorneys & Counselors at Law Park South Professional Center 10440 Park Road, Suite 200 Charlotte, NC 28210

Tel: 704-542-2525 Fax: 704-541-4751

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