What types of legal issues can be addressed through securities arbitration?

Securities arbitration is a legal process that allows investors to resolve disputes with their stockbrokers without filing a lawsuit. In Kansas, the process is overseen by the Financial Industry Regulatory Authority (FINRA). The process is confidential and can be less expensive, quicker, and less stressful than a court trial. Securities arbitration can address a variety of legal issues related to investments, such as negligence, misrepresentation, mismanagement, unsuitable investments, and breach of fiduciary duty. Negligence may occur when a broker fails to exercise reasonable care when investing or managing investor money. For instance, if a broker fails to diversify an investor’s portfolio, which results in an investor taking on too much risk, the investor may be able to recover their losses through a negligence claim. Misrepresentation occurs when a broker provides false or misleading information that affects an investor’s decision-making. For example, if a broker fails to disclose a conflict of interest or misrepresents the performance of a security, an investor may be able to recover their losses through a misrepresentation claim. Mismanagement occurs when a broker fails to follow the instructions of the investor, such as failing to execute a requested trade or making trades without the investor’s consent. Unsuitable investments occur when a broker recommends investments that are not appropriate for the investor’s goals or risk tolerance. Breach of fiduciary duty happens when a broker fails to act in the best interests of the investor. For instance, if a broker fails to inform the investor of a legal obligation or does not properly manage the investor’s assets, the investor may be able to bring a claim of breach of fiduciary duty. Securities arbitration can help investors resolve these and other types of legal issues. The process is designed to provide investors with a fair and speedy resolution of their disputes.

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What types of legal issues can be addressed through securities arbitration?

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