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Questions Answered by Alex Schmidt

2 Answers | Asked in Securities Law for California on

Q: My broker disappeared after I discovered fraudulent misrepresentations associated with my account. Who do I sue if I

don't know his current whereabouts?

Alex Schmidt answered on Nov 21, 2018

You may be able to file a claim against the broker dealer your broker was employed with. If your broker worked at a licensed broker dealer then certain claims you have against the broker can also be leveled against the brokerage firm in a FINRA arbitration. The brokerage firm may be responsible to... Read more »

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1 Answer | Asked in Stockbroker Fraud for Illinois on

Q: I recently learned my stockbroker has been sued in the past and he never disclosed this. When I confronted him, he told

me he was only required to disclose if I directly asked him. Is this true?

Alex Schmidt answered on Nov 19, 2018

Whether a financial advisor registered with FINRA must report to his broker dealer or disclose on his brokercheck when they have” been sued” depends on 2 things:

1. The total settlement amount and whether the registered person was involved in an alleged sales practice violation...
Read more »

1 Answer | Asked in Stockbroker Fraud for New York on

Q: What does 'churning' mean in the context of investment fraud?

Alex Schmidt answered on Nov 12, 2018

Churning in connection with investment fraud is simply when a customers investment advisor generates a high amount of trading activity in the customers investment account in order to collect more commissions. Churning is most commonly measured by checking the turnover ratio of the investment... Read more »

1 Answer | Asked in Stockbroker Fraud for New York on

Q: My stockbroker was part of a Ponzi scheme and he subsequently filed for bankruptcy. Can I still recover money I lost

from him?

Alex Schmidt answered on Oct 29, 2018

Even if your stockbroker has filed for bankruptcy you may still be able to recover investment assets lost in connection with the Ponzi scheme. If your stockbroker was licensed with a registered broker dealer then a FINRA arbitration could be commenced against the broker dealer and recovery of your... Read more »

1 Answer | Asked in Stockbroker Fraud for Illinois on

Q: What agency would I complain to about the way my stockbroker is handling my account? I'm not sure if it's legal.

Alex Schmidt answered on Oct 25, 2018

If you feel your investment account is being mismanaged you can report this to Financial Industry Regulatory Authority or ("FINRA"). This self-regulatory organization or ("SRO") oversees brokerdealers and sets compliance rules by which they must act. FINRA is where customer complaints against... Read more »

1 Answer | Asked in Stockbroker Fraud for New York on

Q: I'm trying to figure out if my "financial planner"

was actually qualified to give me advice on investing - do they have any kind of certification they have to have?

Alex Schmidt answered on Oct 12, 2018

If your "financial planner" is a stockbroker who sells and markets stocks, bonds or other securities products, the easiest way to assess their certifications is checking the FINRA platform Brokercheck. Simply type in the brokers name and you will see what certifications the broker or "financial... Read more »

1 Answer | Asked in Stockbroker Fraud for Illinois on

Q: I asked for documentation/filings from the

company my broker had me invest in and after two months, nothing - is he required to give this to me?

Alex Schmidt answered on Oct 5, 2018

If you have the name of the company you can simply go onto the SEC platform known as EDGAR and enter the name of the company or its ticker. This SEC platform will contain a trove of data on the company at issue. As for the broker there is no regulation that I am aware of that mandates a stock... Read more »

1 Answer | Asked in Stockbroker Fraud for New York on

Q: Do I have a claim for if there was also a general downturn in the market when I lost money?

Alex Schmidt answered on Sep 14, 2018

You absolutely may still have a stockbroker fraud claim if their was a market downturn. Much will depend on the violation that you are alleging occurred whether it be fraud, misrepresentation, unsuitability or any number of potential violations. Your investment losses and whether you have sustained... Read more »

1 Answer | Asked in Stockbroker Fraud for Illinois on

Q: I've heard the rules are changing in protecting

me against bad investments and what a broker has to tell me - is that true?

Alex Schmidt answered on Sep 14, 2018

There are rules in place protecting you against bad or unsuitable investments. FINRA suitability rules for instance require that any investment recommendation made by a broker to an investor must be in line with investors stated financial profile and objectives. What I think you might be... Read more »

1 Answer | Asked in Stockbroker Fraud for New York on

Q: If the stockbroker didn't force you to buy the stock, but did talk it up

and then the investment didn't work out - can we still sue?

Alex Schmidt answered on Aug 23, 2018

As a former Series 7 and 66 stockbroker I can attest to having personally "talked up" many different securities. Whether there is a cause of action depends on what you mean by "talked up". If the stock broker mispresented the issue or provided false information concerning the stock there would be... Read more »

1 Answer | Asked in Stockbroker Fraud for Illinois on

Q: How often are brokers supposed to contact clients? Is it mandated in any way?

Alex Schmidt answered on Aug 23, 2018

Whether a client needs to be contacted really depends on the context concerning the question. If the investment account is a non-discretionary account then the broker has to contact the client prior to each trade being entered. If the account is a managed account where the broker has received... Read more »

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