Chad M. Ostrosky, Esq.
Investor Rights Lawyer
Recovering Investor Losses Nationwide
Life Member of the Million Dollar Advocates Forum®,
The Top Trial Lawyers in America®.
412-444-8529
Chad M. Ostrosky, Esq.
Investor Rights Lawyer
Recovering Investor Losses Nationwide
Life Member of the Million Dollar Advocates Forum®,
The Top Trial Lawyers in America®.
412-444-8529
As a securities arbitration and litigation law firm, we speaks with investors every week who have incurred catastrophic portfolio losses. Whether caused by sudden market shifts, economic volatility, or corporate restructuring, stock market downturns are painful.
However, there is a fundamental difference that every investor needs to understand:
A loss resulting from standard market risk is part of investing. A loss resulting from unsuitable recommendations, omitted facts, or outright fraud is actionable—and recoverable.
Over the past year, as market shifts, AI and tech re-valuations exposed vulnerabilities across portfolios, we have seen a sharp rise in claims filed before the Financial Industry Regulatory Authority (FINRA) and in federal courts. If you have suffered significant financial losses, here is what you need to know about distinguishing market risk from misconduct—and how you can take action.
When an investment plummets, financial advisors often default to standard explanations: "The market is volatile right now," or "We just need to hold long-term." While market downturns happen, those excuses often attempt to cover up actionable broker misconduct or corporate disclosure failures.
Here are four common scenarios where portfolio losses may be legally recoverable:
Brokers have a strict legal and regulatory duty to recommend investments aligned with your age, risk tolerance, investment horizon, and liquidity needs.
The Red Flag: If you are a conservative investor or retiree, but your advisor allocated a heavy percentage of your net worth into speculative equities, leveraged ETFs, or volatile sector funds, your broker may be liable for unsuitability.
Putting "too many eggs in one basket" is one of the leading causes of avoidable investor harm.
The Red Flag: If your financial advisor permitted your portfolio to become concentrated in a single stock, asset class, or high-risk sector without hedging or rebalancing, they may have breached their fiduciary or suitability obligations.
Whether buying into an IPO, a private placement, or a public company, investors are legally entitled to truthful, complete information.
The Red Flag: If a financial firm or corporate leadership omitted key operational risks, inflated revenue projections, or hid crucial debt obligations to convince you to invest, you may have grounds for a securities fraud or Rule 10b-5 claim.
The Red Flag: If you notice high trade frequency on your account statements that seems designed primarily to generate commission fees for the advisor—or trades executed without your prior authorization—you are likely the victim of account abuse.
Recovering securities losses is not like a standard civil lawsuit. Depending on where and how your investments were handled, your recovery path will generally follow one of two tracks:
If your losses occurred in an account managed by a licensed broker or brokerage firm, your customer agreement almost certainly contains a mandatory arbitration clause.
The Process: Cases are submitted to FINRA Dispute Resolution Services. Instead of a judge and jury, your case is heard by a panel of neutral arbitrators.
The Advantage: FINRA arbitration is generally faster and more cost-effective than federal court litigation, providing an efficient forum to recover damages for unsuitability, churning, or failure to supervise.
If your losses stem from corporate misstatements, accounting fraud, or deceptive prospectus disclosures by a public company, relief is typically pursued in federal court under the Securities Act of 1933 or the Securities Exchange Act of 1934.
If you have experienced significant portfolio losses and suspect negligence or bad faith, taking quick action is critical to preserving your rights.
Document Everything: Gather all monthly brokerage statements, trade confirmations, prospectus materials, and emails or text messages with your financial advisor.
Stop Verbal-Only Communication: If you discuss your concerns with your broker, follow up in writing (via email) summarizing what was discussed.
Be Mindful of Statutes of Limitations: Securities claims are subject to strict legal deadlines. Under FINRA rules, claims generally must be submitted within 6 years of the event, but statutory fraud claims often have much shorter timeframes (e.g., 2 years from discovery). Waiting too long can permanently bar your recovery.
Consult a Securities Attorney: Never rely on your broker or their compliance department to determine whether misconduct occurred. An independent legal review of your account trading records is essential.
Experiencing market losses can be overwhelming, but you do not have to accept financial damage caused by broker negligence or institutional deception. Our legal team evaluates investment portfolios to determine whether losses stem from normal market fluctuations or legal violations.
Contact our office today for a confidential, no-cost case evaluation.