Securities Fraud FAQ

What is securities fraud?

Securities fraud is a broad term that includes many specific types of fraud. A broad definition applicable to many of the cases we file is any type of mischaracterization by a securities agent (broker, etc.) that leads investors to purchase or sell investments without full knowledge of risks, often leading to significant losses for the uninformed investors.

What are common types of securities fraud?

A partial list of the many types of securities fraud we address every day at Goodman & Nekvasil can be found below in our Practice Areas:


What is FINRA?

Other types of market manipulation are also considered securities fraud, including insider trading, but our firm solely focuses on recovering losses for investors who have suffered from broker misconduct in client accounts.

Can I resolve my issue with the brokerage firm without hiring an attorney?

If you are involved in a dispute with your broker or brokerage firm, we recommend that you consider seeking legal representation. You should keep in mind that brokers and their firms are almost always represented by counsel when resolving customer disputes, and attorneys with a background in securities law will have experience that most investors are unlikely to have.

Will I be charged for receiving a consultation from your firm?

We offer free, confidential consultations for all first-time clients. If you are considering hiring our firm, please contact us now for your free case evaluation, and learn more about our firm’s process and whether we may be a good choice for you.

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Securities Arbitration

What is securities arbitration?

Securities arbitration is a dispute resolution process which involves a neutral third party to act as both judge and jury. In securities fraud arbitration, that neutral party is a panel of 1 to 3 people jointly selected by each side in the dispute through an arbitrator selection process. In disputes with brokers and brokerage firms, arbitration is the method most frequently used to address investors’ grievances. The arbitration process normally takes less time than a court trial, generally lasting around one to one and one-half years. Arbitration awards are final and binding on both sides.

Is arbitration my only option?

Upon opening an account with a brokerage firm, investors must sign an initial contract. Most of these contracts include a predispute arbitration clause. This clause requires investors, if they have grievances with their brokers, to pursue their disputes in arbitration rather than litigation. Courts routinely approve and enforce these agreements as valid. Accordingly, if you have a dispute with your broker, you are likely required to pursue your recovery through FINRA arbitration.

How long does arbitration take?

The arbitration process normally takes about a year to year and one-half from start to finish, but this length of time is usually shorter than a court trial would be on the same matter. This timeline can vary based on many factors, including the number of parties involved and scheduling issues with the arbitrators.

Where does an arbitration hearing take place?

Arbitration hearings are usually held in cities in the same states as the involved investors, either at a regional FINRA office or a nearby office building or hotel.

Will I be charged for receiving a consultation from Goodman & Nekvasil?

We offer free, confidential consultations for all first-time clients. If you are considering hiring our firm, please contact us now for your free case evaluation, and learn more about our firm’s process and whether we may be a good choice for you.

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Myths About Securities Arbitration

Myth: Arbitration is not as serious as the trial process.

Arbitration proceedings often involve millions of dollars, and awards issued by arbitrators are final and binding. Arbitration proceedings are no less important than the trial process, and, with attorneys who have experience with FINRA arbitration, investors often see positive results.

Myth: Arbitration is biased against individual investors.

The securities arbitration process is widely thought to be a fair process for investors and has served tens of thousands of investors over the years. FINRA reports that “in 2013, approximately 77 percent of customer claimant cases resulted, through settlements or awards, in monetary or non-monetary recovery for the investor.” To address some concerns about fairness in arbitration panels, FINRA now allows all-public panels at investors’ choosing. These all-public panels are composed entirely of arbitrators with no ties to the securities industry, further leveling the playing field for investors and instilling greater confidence in the fairness of the process.

Myth: Arbitration hearings are open to the public.

Arbitration proceedings are private. Documents, including the statement of claim, remain confidential even after the process is over, with the exception of the award, which is available only on FINRA’s website.

Myth: Arbitration is an expensive and lengthy process.

A benefit of pursuing arbitration is that the process is usually shorter and less costly than litigation. While trials may drag on for multiple years, arbitration usually takes about a year to a year and one-half from start to finish, and the costs are generally much less than litigation.

Myth: In arbitration, there is no need for an investor to be represented by legal counsel.

In many securities arbitrations, investors have lost most or all of their life savings, and the stakes are very high. With such large losses, taking a chance at self-representation or hiring inexperienced legal counsel is unwise. Hiring an attorney with extensive experience with securities arbitration is an investor’s best opportunity for recovering losses. At Goodman & Nekvasil our contingent fee structure allows investors to make sound decisions without an initial financial outlay, creating a relationship in which both client and attorney are motivated to seek a full recovery. This situation is the best for investors after they have suffered losses that decrease the funds available to hire legal representation. We encourage potential clients to contact us to learn more.

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