Securities Fraud
Securities fraud is a false statement or omission of a material fact in connection with the purchase or sale of a security, or a scheme to deceive investors. Tracy Pride Stoneman represents investors in these claims in FINRA arbitration nationwide, from Westcliffe, Colorado.
By Tracy Pride Stoneman, securities arbitration attorney Updated
| What happened | Rule or law | How it is proved |
|---|---|---|
| False statement or omission in a sale | Exchange Act §10(b) and Rule 10b-5; Securities Act §12(a)(2); state securities acts (in Colorado, C.R.S. 11-51-501) | Offering documents against what was said; internal emails showing the firm knew |
| Selling unregistered securities | Securities Act §5; state registration requirements | No registration statement and no filed exemption for the offering |
| Ponzi, affinity and selling-away schemes run through a brokerage account | Rule 10b-5; FINRA Rule 3280 (private securities transactions); state fraud statutes | Flow-of-funds analysis, receiver reports, the firm’s outside-business-activity records |
| The firm’s liability for its broker’s fraud | Exchange Act §20(a) control-person liability; FINRA Rule 3110 supervision; respondeat superior | Supervisory sign-offs, red flags the firm ignored, the broker’s complaint history on BrokerCheck |
A FINRA panel can award compensatory damages (out-of-pocket losses or market-adjusted “well-managed account” damages), interest, costs, attorney’s fees where a statute or contract allows them, and punitive damages in egregious cases. Claims must be filed within six years of the events under FINRA Rule 12206, and shorter state statutes of limitation may also apply.
If any of this sounds like your account, the next step costs nothing: a free, honest evaluation. Tell me what happened or call (719) 783-0303.
Common questions
Securities Fraud: what clients ask
What counts as a material misrepresentation?
A fact is material if a reasonable investor would consider it important in deciding whether to buy, hold, or sell. Misstating the risk of a product, hiding fees, or promising returns that were never realistic are common examples.
Does the broker have to have intended to deceive me?
Not always. Some claims require proof of intent, but others, such as negligent misrepresentation or breach of the duty to recommend suitable investments, do not. The right claim depends on what happened in your account.
What evidence helps a securities fraud claim?
Account statements, trade confirmations, emails or texts with the broker, sales brochures, and your own notes of what you were told. Even partial records help, because the firm is required to keep its own.
Your move
A free evaluation has no downside other than your time.
Tell me what happened. I will tell you honestly whether you have a case worth pursuing — and every way I can be paid, including contingency: nothing unless you recover.