by Brian Mahany
Jason Zweig is one of my favorite columnists at the Wall Street Journal. Minutes ago I read his column in today’s WSJ, “Too Flustered to Trade: A Portrait of the Angry Investor.” Zweig’s premise is that as flustered and angry as individual investors are today, many are simply sitting on the sidelines watching with a sense of helpless horror. It’s true, trillions of dollars of investment dollars remain parked in the market. Unfortunately, many investors simply feel powerless to act or have no direction. Not all do, however.
The recent economic meltdown has many investors taking it out on the brokers. According to the Financial Industry Regulatory Authority (FINRA), in 2007 there were 891 claims of negligence filed against brokerage firms in the U.S. Last year that numbered jumped to 2698, an increase of over 300%. Claims of unsuitable securities recommendations? 1974 last year up from 695 in 2007. Claims of misrepresentation skyrocketed 460% in just 2 years!
One might say that these are simply disgruntled or unhappy investors looking for someone to sue. Not so. FINRA says 48% of the securities arbitration claims filed last year against brokerage firms resulted in an award for the claimant. When you consider that many cases settle privately, it is estimated that 75% of claimants received money last year.
Angry investors might have no one to blame but themselves if they picked their own stocks or mutual funds but those that relied on a stockbroker or investment advisor to assist them may have a claim for their portfolio losses. While there are no guarantees in the market, stockbrokers have a duty to know their customers and make recommendations suitable for them. In many cases, the broker sells what earns him or her the highest commission.
If you been victimized by a bad broker, contact an experienced investment fraud attorney. Securities fraud cases are usually arbitrated and a decision is often rendered within a year. In many instances, these cases can be handled on a contingent fee basis meaning no fee unless you win.
With the recent market swings, another round of complaints are likely to begin. Although Zweig cites statistics suggesting that 87% of investors don’t trust brokers, very few will do anything about their losses. That’s a shame.
For more information, contact attorney Brian Mahany at (414) 704-6731 (direct) or by email at All calls are completely confidential.
Mahany & Ertl, LLC. – America’s fraud lawyers. Offices across the United States. Services nationwide.