If Problems Arise
Description
This article is from the What Every Investor Should Know.
If Problems Arise
As with any business relationship, in dealing with your brokerage firm, there may be situations in which errors or operational problems occur. Your first step to try to promptly resolve these kinds of situations should be to contact your account executive or the branch manager of the firm, and then confirm your complaint in writing. If you are unable to obtain a satisfactory response, you may wish to contact an exchange of which the broker-dealer is a member or the local district office of the NASD.
Most of the SROs sponsor an arbitration program to consider and decide disputes between broker-dealers and their customers. If you signed an agreement to arbitrate any disputes at the time you opened your account, you gave up the right to take your broker to court. For claims up to $10,000, a simplified arbitration procedure is available. In this procedure, for a modest filing fee, a single impartial arbitrator reviews the dispute and determines a binding settlement. The arbitration procedure is also available before a panel for large claims.
It may be desirable to consult with an attorney knowledgeable about securities laws before starting arbitration proceedings if you have some doubt about the nature of your claim or in what forum you may want to pursue it. You may elect to be represented by an attorney during the arbitration process, but there is no requirement that you do so. Normally, broker-dealers have securities attorneys representing them.
If you believe that there may have been fraudulent conduct or a possible violation of securities laws or regulations, you may wish to bring your concerns to the attention of the SEC or one of the SROs for regulatory review. The SEC welcomes inquiries and complaints about questionable securities practices. Such information assists the SEC in identifying problem areas and targeting its enforcement and regulatory activities.
While contacting the SEC or an SRO may help to resolve the matter, investors should remember that the SEC cannot function as a collection agency or directly represent them in a dispute; therefore, this action does not take the place of private legal remedies.
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