Since the financial crisis of 2008, state and federal securities laws have been more strictly enforced, resulting in fines and prison sentences for investment professionals as well as sanctions for their employers. While most broker-dealers and investment advisers put their clients’ best interests first when making recommendations, securities fraud and other types of misconduct are not uncommon. If you have been accused of a securities violation in Florida, it is critically important to have proper legal representation.
Located in West Palm Beach, Herman Law, P.A. has extensive experience defending clients who have been charged with state and federal securities violations. We are equally comfortable representing clients in civil and criminal court cases, regulatory enforcement actions and securities arbitration proceedings. Knowing that investment professionals face the risk of imprisonment, being banned from the industry, and permanent reputational harm, we are dedicated to helping our clients fight back against overzealous prosecutors and regulators.
Our legal team is well-versed in the applicable federal securities laws and Florida “blue sky” laws including:
- The Securities Act of 1933
- The Securities Exchange Act of 1934
- The Investment Company Act of 1940
- The Sarbanes-Oxley Act of 2002
- The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010
- The Florida Securities and Investor Protection Act (Florida Statutes Chapter 517)
When you become our client, you will have confidence knowing that we are in your corner, fighting to protect your freedom and your livelihood.
Common Securities Violations
We have a proven track record of defending investment professionals and companies against a wide range of securities violations, such as:
- Sale of Unregistered Securities — It is a violation of state and federal law to sell an unregistered security in Florida unless it is (1) exempt under state law or (2) a federal covered security.
- Breach of Fiduciary Duty — Broker-dealers and investment advisors must act in a reasonable and prudent manner when making recommendations. When investors rely on this advice, a fiduciary relationship is formed which means that brokers and advisors must put their clients’ best interest first.
- Misrepresentation — This violation occurs when an investment professional misrepresents or omits a material fact related to a security or an investment.
- Churning — Churning occurs when a broker frequently trades securities in customer accounts solely to make commissions, without regard for the investor’s financial resources or investment objectives.
- Unsuitable investments –Brokers and advisors are required to “know their customers” before making recommendations. An investment must be suitable with respect to a customer’s financial situation, age, experience, investment objectives, and risk tolerance. A broker or advisor who advises a customer to make unsuitable investments can be held liable for the investor’s losses.
- Failure to diversify — An investment professional who fails to diversify a client’s portfolio by over-concentrating in a single investment or industry can be held liable for portfolio mismanagement.
- Unauthorized trading — This occurs when a broker trades a security without a client’s knowledge or permission. Trades cannot be made without consent unless the broker has been given written discretion or trading authorization by the client.
- Failure to supervise — An investment firm has a duty to supervise its brokers and their investment recommendations to ensure compliance with and prevent violations of industry rules. A firm can be held liable for an investor’s losses if a broker is negligent or acts in an unlawful manner.
- Securities fraud — This involves deceptive practices that induce investors to make purchase or sale decisions based on false or incomplete information, in violation of securities laws. The term securities fraud covers a wide range of illegal activities and securities violations, such as misrepresentation, churning, and insider trading.
What is Securities Arbitration?
Registered investment advisors must also adhere to rules and regulations regarding customer accounts that have been established by the Financial Industry Regulatory Authority (FINRA). If a violation results in an investment loss, a claim may be resolved through a Finra arbitration proceeding.
Arbitration differs from a court trial in a number of ways. First, it is a faster and less expensive means of resolving disputes. A neutral third party, or an arbitrator, is selected to resolve the dispute, and the arbitrator’s decision is final and binding. By pursuing arbitration, the claim cannot be decided by a court of law. Herman Law, P.A. routinely represents brokers and advisors who are facing claims of sales practice violations in FINRA arbitration proceedings.
Defending Investment Professionals Against Securities Violations
At Herman Law, P.A., we leverage our insight into how state and federal prosecutors operate to design innovative defense strategies against charges of securities violations. If you are under investigation by the Securities and Exchange Commission (SEC), the Commodities Futures Trading Commission (CFTC), the Department of Justice, Finra, the Florida Office of Financial Regulation (OFR), or the Attorney General, you need the advice and counsel we are prepared to provide.
Regardless of the forum, litigation, arbitration or regulatory enforcement actions, we have the knowledge and experience to achieve the best outcome for your case. Whether you are involved in a criminal or civil case, it takes a highly skilled securities law attorney to protect your rights, your freedom, and your reputation. Please contact our office as soon as possible to set up a consultation.