In my last blog on securities arbitration, I promised to talk about how to investigate your broker or brokerage firm before you invest, and help save yourself from the need for securities litigation.
Step 1. Investigate the licensing of the broker and brokerage firm. Investigate the license of all parties involved before you consider if you’d like to invest. It doesn’t matter what payoff is promised. Don’t even waist your time listening to the pitch unless you have investigated their license. Securities litigation becomes necessary once a con-artist has swindled you. The name says it all. Con-artists make an art out of gaining your confidence. You need to know if those words are true before you hear the pitch on the investment. For license information onbrokers, call your state’s securities regulator and FINRA (Financial Industry Regulatory Authority.) From these sources you can not only find out about licensing and registration, but also if a person or firm has a history of problems with regulators and complaints from investors. For information on investment advisers, read their registration forms. You can get their registration forms (Form ADV) online by visiting the SEC’s Investment Adviser Public Disclosure (IAPD) website. For the moment, only advisers that register electronically are catalogued in the IAPD’s database. Depending on the size of the advisor, you can also get copies of Form ADV that were not filed electronically from the investment adviser, your state securities regulator, or the SEC.
Step 2. Find out if the investment itself is registered. To find out if an investment is registered and avoid securities litigation, check it out using the SEC’s EDGAR database or call toll free at (800)732-0330. An investment being registered is not proof that the investment is legitimate. An investment not being registered isn’t necessarily a sign that the investment is illegitimate. There are company’s that are exempt from registration for a myriad of reasons. However, when you check to see if a company is registered, it will tell you if they are exempt from registering. It is more risky to invest in a product when there is little to no information on it. It is easy for a broker or brokerage firm to manipulate prices or spread false information when there is no information available to prove otherwise. If an investment isn’t registered with the SEC, find out if it is registered with your state’s securities regulator. If it isn’t registered with the SEC or your state, and it’s not exempt from registration, call or write your state’s securities regulator or the SEC immediately with all the details. You very well may have discovered a scam.
In my next blog, we’ll talk about the last four steps to investigating possible investment opportunities and help keep you out of the securities litigation process. Please, if you are not getting anywhere with resolving securities issues on your own, call S. David Anton of Anton Legal Group!
S. David Anton, Esquire is a Certified Arbitrator for the Financial Industry Regulatory Authority (FINRA), formerly the NASD, which is the national organization responsible for overseeing the securities industry. He has served as a Judge/Panelist and rendered decisions in many securities arbitration, giving him a unique perspective on his client’s cases.