Investors defrauded around the time of the 2007/2008 housing market crash and resulting economic recession are running out of time to file claims against brokerage firms for recovery.
FINRA rules provide that defrauded investors have a six-year eligibility period in which to file a claim against a brokerage firm and pursue arbitration for losses cause by investment fraud or misconduct. While other limitations may also come into play, for those individual and institutional investors who sustained losses in late 2007 or early 2008 and have reason to believe the losses were due to bad practices of their stockbroker or financial advisor, they must file a claim for recovery within the next few months. Our law firm has had several calls lately from investors who waited too long to call us about a potential claim, and it's difficult to tell them that the time limit for filing has expired.
Many investors wait too long to call because they don't examine their losses deeply enough to determine whether they stemmed from negligent broker practices. If you had losses around the time of the market crash and haven't examined them, here are some questions to think about:
- Do you feel that your broker failed to monitor the changing markets for the impact on your investments or failed to advise you of the risks involved with following broker recommendations? If so, you might have a claim against your broker for Breach of Fiduciary Duty.
- Do you feel that your broker failed to properly diversify your portfolio based on your age, financial goals and stage in life? If so, you may have a claim against your broker for improper Asset Allocation or Overconcentration.
- Do you feel that your broker exercised improper control over your account and made improper trades or an inordinate number of trades, causing you financial loss? If so, you may have a claim against your broker for Excessive Activity or Churning.
Don't let thoughts of "I should have seen what was happening" or "I should have known better" stop you from calling us now – even nearly six years later. Even if you did ask questions at the time, brokerage firms know how to answer them to avoid arousing further suspicion. Never settle for a quick answer. Ask to speak to branch managers or supervisor. Ask trusted friends for advice.
If you've sustained losses that you believe may be due to misconduct around the time of the market crash, you must file as soon as possible to attempt to recover through mandatory and binding FINRA arbitration.