Recovering investment losses can be a difficult and complex process, but there are a few things you can do to increase your chances of success:
Identify the cause of your losses. This will help you determine the best course of action. For example, if you lost money due to fraud or misconduct by a broker-dealer, you may be able to file a complaint with FINRA or sue the broker-dealer in court.
Gather evidence. This will include documentation of your losses, such as account statements, trading records, and any correspondence with your broker-dealer. You may also want to gather evidence of the misconduct that led to your losses, such as emails or phone calls with your broker-dealer.
Retain an experienced securities lawyer. Investment loss recovery is a hyper-specialized practice area. Don't choose your run of the mill personal injury lawyer. Experienced securities lawyers can advise you on your legal options and help you navigate the process of recovering your losses.
Be persistent. Recovering investment losses can take time and effort, including testifying at a final arbitration hearing or trial if the case doesn't settle.
Here are some specific steps you can take to recover investment losses:
File a claim with FINRA arbitration. FINRA is a self-regulatory organization that oversees the securities industry in the United States. If you believe that you have been the victim of fraud or other misconduct by a FINRA member, you can file a Statement of Claims in FINRA arbitration. FINRA may separately investigate the complaint and take disciplinary action against the member.
File a claim with AAA or JAMS arbitration. When the cause of your losses is not a FINRA member, for example a hedge fund or certain investment advisors, you may need to file the claim in AAA and JAMS arbitration depending on your contract.
File a lawsuit in court. If there is not an arbitration agreement, you may want to consider filing a lawsuit in court to recover your investment losses. This can be a complex and expensive process, but it may be necessary if you have suffered significant losses.
Use tax-loss harvesting. If you have investment losses in one year, you can use them to offset capital gains in that year or in future years. This can reduce your overall tax liability.
It is important to note that there is no guarantee that you will be able to recover your investment losses. However, by following the steps above, you can increase your chances of success.
Here are some additional tips for recovering investment losses:
Be proactive. Don't wait until it's too late to take action. If you suspect that you may have lost money due to fraud or other misconduct, contact an experienced securities attorney immediately.
Keep good records of your investments and any correspondence with your broker-dealer. This will make it easier to document your losses and support your claim.
Be patient. Recovering investment losses can take time and effort. FINRA arbitrations generally take 12-18 months. Filing an lawsuit in federal or state court can take significantly longer.
Contact our office to discuss your specific case and options to pursue recovery of your investment.