New Jersey Securities Litigation Attorney

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When people invest in securities like stocks and mutual funds, they are often doing so with large amounts of money, such as their retirement savings, life savings or inheritance. That is why investors often decide to work with a financial adviser.

While most advisers will take great care with their clients’ investments, some will engage in fraud that can cause you to lose a significant amount of money. If this happens, you should contact a New Jersey securities litigation attorney to determine your legal options.

The lawyers at Lynch Law Firm, PC have the experience and legal knowledge to take on complex securities fraud cases. If you come to us with a viable claim, our goal will be to recover all of the funds you lost along with compensation for damages caused by your adviser’s fraudulent actions.

Schedule a free consultation today by calling (800) 518-0508 .

Types of Securities Fraud Cases

Our firm represents individuals, businesses and investment funds that were victims of fraud in their securities investments, including:

  • Stocks
  • Bonds
  • Real estate investment trusts
  • Annuities
  • Currency
  • Mutual funds
  • Options

We take cases involving a variety of types of fraud and misconduct, including:


Financial advisers have a duty to know their clients, including the amount of risk they are willing to take on with their investments. Your adviser should not only discuss your risk tolerance but also recommend and make investments that fit your risk tolerance. If your adviser chooses investments that do not fit your risk tolerance and you suffer losses, you may be able to take legal action to recover compensation.

Misrepresentation or Failure to Disclose Risks

Sometimes brokers make false claims or fail to disclose all of the risks of a particular investment. For instance, a broker could advise you to invest in derivatives without informing you that you could lose 100 percent of your investment principal. If your broker misrepresented or failed to disclose risks, he or she could be held liable for your losses.

Breach of Fiduciary Duty

Fiduciary duty is your broker’s obligation to put your best interests above his or her own financial interests. Unfortunately, brokers sometimes ignore this duty and do what is in their best interest.


This is one of the more common types of securities fraud. It occurs when a broker engages in excessive trading of your money simply to generate commission. Signs of churning could include frequent in-and-out purchases and sales of securities that do not appear necessary for your investment goals.

Fraud on the Market

This is when a company engages in fraud to inflate its stock price. One way a company could do this is by failing to disclose information about its true financial performance. If this occurred and it resulted in you losing substantial funds, the company could be held liable for fraud.


These are claims where a financial adviser did not comply with industry standards or did not act the way a reasonably prudent adviser would have if he or she were in a similar situation.

Ponzi Schemes

These are also called pyramid schemes. These are schemes where someone attracts new investors and uses their money as returns to pay older investors. Clients are promised huge profits with almost no risk. When the people running the scheme are unable to attract new investors, money stops flowing and the scheme collapses.

Margin Claims

These claims arise when brokers advise their clients to borrow on the margin to buy securities. Brokers then advise their clients to sell the securities to pay off the balance. While this generates revenue for the brokerage firm, clients lose money.

High-Pressure Sales Tactics

Sometimes brokers use aggressive sales tactics to induce people to quickly decide to purchase a security. High pressure sales tactics could include stressing the urgency of the investment and that there is a need to act immediately. If your New Jersey securities litigation lawyer can prove you were a victim of high-pressure sales tactics, the broker could be held liable for all of your investment losses.

Unauthorized Trading

This is when a broker makes a trade without obtaining his or her client’s consent. This can include situations where the broker had discretion to make trades without first obtaining your approval. In these cases, a trade would be unauthorized if the client limited the scope of the trades the broker had the discretion to make.

Switching of Mutual Funds, Bonds or Annuities

This is when an adviser recommends you sell a group of investments so he or she can buy a nearly identical group of investments for the purpose of generating a commission.


Some brokers fail to diversify their clients’ investments, leaving your investments exposed to a single sector of the economy or a few securities. In these situations, you may be able to recover losses.

Failure to Supervise

Brokerage firms are obligated to supervise brokers to ensure they are managing their clients’ investments appropriately. This responsibility is particularly important when the broker in question has a record of past misconduct.

Breach of Contract

In most cases, brokerage firms will require you to sign an agreement outlining your broker’s legal obligations. If any terms of the contract are violated, you may be entitled to damages.

Contact our New Jersey securities litigation attorneys today. Fill out a Free Case Evaluation form.

Federal and State Laws on Securities Fraud

The forms of securities fraud above are prohibited under federal and state laws, such as the Securities Exchange Act of 1934 and the New Jersey Uniform Securities Law.

The Securities Exchange Act, also called the Exchange Act, is a federal law that primarily regulates securities transactions that take place on the secondary market. The secondary market consists of transactions that happen after the security was first offered by a company.

The New Jersey Uniform Securities Law and Section 10b of the Exchange Act prohibit anyone from using interstate commerce or the mails of any national securities exchange for the following purposes:

  • To use a device, scheme or artifice to commit fraud
  • To make an untrue statement or fail to state a material fact that results in misleading another person
  • To engage in any action, practice or course of business that is fraudulent or deceitful

Section 9 of the Exchange Act allows investors to sue for trading activities and patterns of conduct that cause investors to believe that a stock is:

  • Performing better or worse than it actually is
  • Being traded more frequently than it actually is
  • Being manipulated in a way to makes it seem like the price is stable

Section 18 says that investors who purchased or sold a security can sue over fraudulent statements in periodic filings with the SEC.

Call our New Jersey securities litigation lawyers right now at (800) 518-0508 .

FINRA Arbitration

While the law gives you the right to pursue a civil lawsuit over securities fraud, most cases are resolved through arbitration proceedings before the Financial Industry Regulatory Authority (FINRA). This is often because investors signed agreements with their advisers that mandate arbitration when disputes arise.

A New Jersey securities litigation lawyer can manage every step of your FINRA arbitration claim. This includes:

Filing a Statement of Claim

The first step in the process is filing a statement of claim describing the fraud that occurred. Our attorneys will carefully review your financial statements and work with financial experts to calculate the damages you suffered, including the amount of money you lost. Your claim can also request attorney’s fees.

Once the statement of claim is drafted and filed, the investment/brokerage firm has 45 days to respond.

Choosing Arbitrators

Your claim will be presided over by one arbitrator or a panel of three. A single arbitrator is used for claims where the damages are between $50,000 and $100,000. A panel is used when the dispute involves more than $100,000 in damages.

Both sides must agree on the arbitrators who are selected. If either side objects to an arbitrator, this person becomes ineligible for the panel.

Managing the Discovery Process

In a FINRA arbitration, depositions and interrogatories are not allowed. The process usually consists of both sides requesting documents from the other.

Your New Jersey securities litigation attorney can try to collect all relevant documents to support your claim. He or she can also help you produce documents requested by the other side, including brokerage statements or correspondence you received from the adviser.

Representing You at the Hearing

Your attorney can handle every aspect of the hearing, just like he or she would in a civil trial, including:

  • Presenting evidence
  • Questioning witnesses
  • Making opening and closing statements

Once the hearing is concluded, FINRA typically issues a decision within 30 days. The decision is almost always final, with limited opportunities to appeal.

Overall, the whole process from investigating your situation and filing a claim to the arbitration hearing lasts anywhere from 12 to 18 months.

Click here to contact Lynch Law Firm, PC’s New Jersey securities litigation attorneys.

What is the Statute of Limitations on Filing for Arbitration?

Under Section 12206 of FINRA’s Code of Arbitration Procedure for Customer Disputes, you are prohibited from filing a claim for arbitration more than six years from the event that gave rise to your claim.

This type of rule is also known as a statute of limitations. If the statute expires before you file a claim, you will be prohibited from doing so.

Our New Jersey securities litigation attorneys can carefully review your claim to determine when the statute of limitations runs out.

Schedule a consultation with our attorneys by calling (800) 518-0508 .

How to Avoid Securities Fraud

If you are a victim of securities fraud, you may want to avoid investing altogether for fear of it happening again. However, this is unrealistic, as you may need to continue investing to fund your retirement, save for your child’s college tuition or save for other large expenses.

Fortunately, there are steps you can take to reduce your risk of being a victim of fraud:

Do Your Research

You should never agree to work with a brokerage firm or adviser without conducting research. You need to know the following:

  • Type of business the adviser and his firm conduct
  • Products they sell
  • Services they offer
  • The company’s financial situation, which you can determine by reviewing the company’s financial statements on the SEC website

Get to Know Your Broker

Getting to know your broker socially can be helpful, but you should also confirm he or she is licensed to sell securities in your state. Find out about any issues this individual has had with regulators, investors or his or her firm.

You can look up registration records for brokers and their firms on the New Jersey Division of Consumer Affairs website. This section also allows you to review any actions that have been filed against the broker or his or her firm.

Do Not Give a Broker Full Control

This is often a recipe for disaster. It may be tempting to just let the broker handle everything but this makes it a lot easier for him or her to commit fraud without you realizing it right away.

If a broker tells you that you do not need to be involved in your investments and that he or she can do all of the work, this may be a red flag indicating the broker intends to commit fraud.

You should ask your broker to provide you with regular statements about activity with your investments. If you do not understand something, ask the broker for clarification. If you request money and the broker says this is not possible, it could be a sign that the broker has stolen some of your money for his or her own purposes.

If you have any reason to believe you have been a victim of securities fraud, contact our New Jersey securities litigation lawyers today for a free consultation. We can advise you of all of your rights and will be prepared to pursue compensation if you have a viable claim.

Contact Lynch Law Firm, PC for a free legal consultation.

Contact a New Jersey Securities Litigation Attorney

Federal and state regulators are responsible for uncovering fraudulent investment practices. Unfortunately, they are not able to catch every instance of fraud brokers and brokerage firms commit with their investors’ money.

If you want to recover your losses, you will need to file a claim for FINRA arbitration or a civil lawsuit. Our experienced lawyers can help you every step of the way, pursuing all of the compensation you deserve.

These cases are complex and can seem daunting to pursue on your own. If you work with an attorney, you can rest assured that your claim is in the hands of professionals with extensive legal knowledge and experience.

Fill out a Free Case Evaluation form or call us at (800) 518-0508 .


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