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Financial Advisors Need to Be Prepared For Litigation
Financial Advisors are the number one litigious target in America today, according to Robert S. Mills, president of Financial Advisors Legal Association of Las Vegas.1
"Typically, when the markets are down, complaints and arbitration go up," said John Gannon, senior vice president of investor education at FINRA, an independent regulator that oversees nearly 4,900 brokerage firms, 173,000 branch offices and 651,000 securities representatives nationwide. "Some people may have lost money, and they feel it's because of something someone did wrong."2
Investors filed 2,403 arbitrations against FINRA members this year through April 2009, up 81 percent over the same period in 2008, agency data show. The regulator received 5,405 complaints last year, up from 4,552 in 2007.2
Last year, FINRA indicates that approximately 74% of all securities fraud claims filed by investors resulted in a monetary or non-monetary recovery in favor of the investor, either through settlement or an arbitration award.3
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