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Investment and Securities Law Frequently Asked Questions

Why do I need to hire an attorney?

A seasoned attorney will know how to evaluate the situation and recommend steps to mitigate losses. The attorney will know how to collect and preserve pertinent information to establish that you were harmed. Remember, the firm will only offer compensation if it can be legally proven they were at fault or if it is a good business decision on their end. In the event there is liability, the firm will try to settle the matter for a low dollar amount. The attorney will be able to determine the exact dollar amount that you were harmed and to take steps to make you whole. All communications pertaining to the violation should be conducted between your attorney and the stock brokerage firm. You should not communicate directly with the firm regarding the violation because you might say something to damage your case. The firm will start building a case against you immediately, and anything you say or subsequently do might affect your case.

What happens once I hire an attorney?

Your attorney will take steps to prevent any future losses. In addition, your attorney will try to persuade the firm how you were damaged and to substantiate your losses. Depending on the firm, attorney and case, a customer could be made whole at this point. If the firm does not to make an acceptable offer your attorney will file suit, either through the courts or arbitration.

Who decides whether the case is litigated in court or arbitration?

Many customers sign an arbitration agreement when they open an account. If they signed an arbitration agreement the forum to litigate the matter will be through some type of arbitration forum. The two most popular forums are the NYSE and NASD. If an arbitration agreement was not signed the customer might have the option to litigate in the courts or by arbitration. The majority of cases are heard by an arbitration panel.

Is there a difference between court and arbitration?

Arbitration is a faster and cheaper forum to litigate. In an arbitration proceeding there are no juries and the rules of evidence do not apply

What are the elements of arbitration?

The customer files a Uniform Submission Agreement and a Statement of Claim. The Uniform Submission Agreement is a signed document that submits the dispute to the arbitrators. A Statement of Claim is similar to a legal brief. It is a written narrative that describes the facts of the dispute. The other party then has a chance to respond in what is called an Answer along with their Uniform Submission Agreement and any counter-claims. The next stage is Discovery. This is where each side is allowed to obtained documents from the other side in order to help them evaluate and strategize their case. Once Discovery has been completed a Hearing date is set. The Hearing is similar to a trial where each side puts on their case in front of the arbitrators. After the Hearing is complete the arbitrators will issue a ruling. In very limited instances can appeal be granted.

How much does it cost to arbitrate?

The NYSE and NASD require both a filing fee and a hearing fee when submitting a request to arbitrate. The fees depend on the amount that you are seeking. The NYSE requires a filing fee of $15 to$300 and a hearing fee between $15 and $1500. NASD filing fees run from $25 to $600 with hearing fees from $25 to $1200.

About the Author:

David Harrison, Esq. David Harrison is a founding partner in the law firm of Spivak & Harrison. Mr. Harrison served as in-house counsel to the brokerage firm Morgan Stanley Dean Witter where he resolved allegations regarding stockbroker wrongdoing. Mr. Harrison was formerly series seven licensed when he worked as a broker at Shearson Lehman Brothers. Mr. Harrison concentrates in the areas of stockbroker fraud and securities litigation. Mr. Harrison can be reached at (310) 772-2274 or http://www.shlawyers.com

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