What types of claims can be brought in a securities arbitration?

Securities arbitration is a method of dispute resolution that allows parties to resolve disagreements out of court. In California, disputes between investors and their brokers or brokerage firms, as well as disputes between broker-dealers and broker-dealer firms, are typically resolved through securities arbitration. Generally, these disputes involve investments, such as stocks, bonds, and other securities. There are three main types of claims that can be brought in a securities arbitration: fraud, negligence, and breach of contract. Fraud claims involve the misrepresentation of facts or information related to an investment. Negligence claims involve careless investing advice or inadequate disclosure of investment risks. Breach of contract claims involve violations of the terms of an agreement related to the purchase or sale of a security. In addition, parties can also present a variety of other claims in a securities arbitration, such as unsuitability, unauthorized trading, and violation of industry rules. Unsuitability occurs when a broker recommends an investment that does not match the investor’s goals or financial position. Unauthorized trading is when a broker buys or sells securities without obtaining investor approval. Lastly, the violation of industry rules may involve the failure to comply with the Financial Industry Regulatory Authority’s (FINRA) rules and regulations. Ultimately, if an investor feels like they have been wronged or mistreated by their broker or brokerage firm, they can file a claim in securities arbitration in order to seek compensation and justice.

Related FAQs

What types of claims can be brought in a securities arbitration?

Related FAQs

Related Blog Posts