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If your financial advisor or stockbroker misled you, made trades without your permission, or put your money into investments that were never appropriate for you, you may have a legal right to recover every dollar you lost — and then some.
At Patil Law, our investment fraud attorneys have recovered more than $25 million for individual investors across the United States. We have represented hundreds of clients in FINRA arbitration and securities litigation against the country’s largest brokerage firms, including Merrill Lynch, LPL Financial, Morgan Stanley, Cetera Financial, Raymond James, and UBS.
We work exclusively on a contingency fee basis. That means you pay nothing unless we win — no retainer, no hourly rate, no upfront cost of any kind. Your consultation is free and confidential.
If you lost money and something felt wrong, call us at 800-950-6553. The call takes 15 minutes, and you will know exactly where you stand.
Preston L. (attorney)
Joan P. (attorney)
What Is Investment Fraud? (And How Do You Know If You Have a Case?)
Investment fraud occurs when a financial professional — a stockbroker, financial advisor, or investment firm — uses deception, misrepresentation, or manipulation to take money from investors. It does not have to look like an obvious scam. In fact, most of our clients never suspected anything was wrong until they looked closely at their account statements or hired an attorney to review their records.
The law does not require you to prove you were intentionally deceived. Many successful investment fraud claims are built on negligence, unsuitable recommendations, or a broker’s failure to disclose critical risks. If your financial advisor acted in a way that was not in your best interest — and you suffered losses because of it — you may have a claim.
Common Questions We Hear From Investors
“My broker said this was a safe investment, but I lost everything. Is that fraud?”
Possibly. If the investment carried risks your broker never disclosed, or if it was unsuitable for your age, risk tolerance, or financial goals, that can be the basis of a securities fraud or negligence claim.
“My account kept losing money even when the market was going up. Is that normal?”
No. Excessive account losses compared to market benchmarks can indicate churning — a practice where brokers make unnecessary trades to generate commissions at the expense of your returns.
“I didn’t authorize some of the trades in my account. What does that mean?”
Unauthorized trading is a serious violation of FINRA rules and securities law. If your broker placed trades you did not approve, you have the right to pursue damages.
10 Warning Signs Your Broker or Advisor Committed Fraud
Most victims of investment fraud do not immediately recognize what happened. Brokers are skilled at minimizing losses and reassuring clients. Watch for these specific warning signs:
- Losses that far exceed market benchmarks — if the S&P 500 gained 15% but your account lost 20%, something is wrong
- Frequent trading in your account generating large commissions — a classic sign of churning
- Investments you did not understand or were not clearly explained
- Trades placed in your account that you did not authorize or approve
- Pressure to move quickly or “not miss this opportunity” — high-pressure sales are a red flag
- Account statements that are confusing, hard to read, or that your advisor was reluctant to explain
- Guarantees of returns — no legitimate investment comes with a guaranteed return
- Concentration of your portfolio in one stock, sector, or product without adequate explanation
- An investment that turned out to be illiquid — a REIT, private placement, or structured product you cannot easily sell
- A financial advisor who is unregistered, unlicensed, or whose background you cannot verify on FINRA BrokerCheck
You do not need to check every box to have a valid claim. If two or three of these apply to your situation, we encourage you to call us for a free case evaluation.
Types of Investment Fraud We Handle
Our investment fraud attorneys handle the full spectrum of securities misconduct claims. Below are the most common types of cases we take:
Broker Churning (Excessive Trading)
Churning occurs when a broker excessively buys and sells securities in a client’s account to generate commissions, regardless of whether those trades benefit the client. It is one of the most common forms of broker misconduct and one of the most financially damaging. Churning is a direct violation of FINRA rules and can support claims for compensatory and punitive damages. Learn more about broker misconduct claims.
Unauthorized Trading
Brokers are required to obtain your authorization before executing trades in your account — unless you have specifically granted them discretionary authority in writing. Unauthorized trading occurs when a broker acts without that authorization. Even a single unauthorized trade can support a legal claim, and patterns of unauthorized trading are treated seriously by FINRA arbitration panels.
Unsuitable Investment Recommendations
Financial advisors are legally required to recommend investments that are appropriate for your specific financial situation, investment goals, and risk tolerance. Recommending a speculative penny stock to a 72-year-old retiree on a fixed income, for example, is a textbook suitability violation. The SEC and FINRA both maintain suitability and best-interest standards that brokers must follow.
Misrepresentation and Material Omissions
Brokers commit fraud when they make false statements about an investment — overstating potential returns, understating risks, or failing to disclose conflicts of interest. Omitting material facts can be just as illegal as an outright lie. If you were told an investment was ‘low risk’ or ‘guaranteed’ when it was not, that is likely fraud.
Ponzi Schemes and Fraudulent Investment Programs
Ponzi schemes pay early investors using money from new investors, creating the illusion of legitimate returns while the operator pockets the difference. These schemes inevitably collapse. If you invested in what turned out to be a Ponzi scheme — whether operated by a registered broker or an unlicensed individual — you have legal avenues to pursue recovery. Learn about Ponzi scheme recovery.
Failure to Supervise
Brokerage firms have a legal obligation to supervise the brokers they employ. When a broker engages in fraud or misconduct, the firm itself is often liable if it failed to detect or prevent that misconduct. Failure-to-supervise claims allow investors to pursue the brokerage firm directly — which is critical because firms typically have far deeper pockets than individual brokers. Learn about failure to supervise claims.
Elder Financial Abuse
Elderly investors are disproportionately targeted by unscrupulous brokers and advisors. Common schemes include unsuitable annuity sales, misappropriation of retirement funds, and exploitation of cognitive decline. Our firm has extensive experience representing elderly investors and their families. Learn about elder financial abuse claims.
Non-Traded REIT and Alternative Investment Losses
Non-traded REITs, private placements, and structured products are commonly sold to retail investors who are not adequately informed about the risks — including the fact that these investments are often illiquid, meaning you cannot sell them when you need the money. If you were sold one of these products without full disclosure of the risks and restrictions, you may have a claim.
Cryptocurrency and Digital Asset Fraud
Cryptocurrency-related investment fraud has exploded in recent years, including fraudulent crypto trading platforms, pig butchering scams, and advisors who misappropriate client funds by directing them into unregistered crypto investments. Our firm handles crypto fraud and digital asset loss claims. Learn about cryptocurrency fraud claims.
What Damages Can You Recover?
Investment fraud victims are typically entitled to recover the full value of their losses. In some cases, you can recover significantly more. Here is what you may be able to claim:
Compensatory Damages
These are the actual financial losses you suffered as a direct result of the fraud or misconduct. This typically includes the difference between what your account was worth when you invested and what it is worth now, adjusted for legitimate market losses.
Out-of-Pocket Losses
Any commissions, fees, or other charges you paid as a result of the fraudulent activity can be recovered as part of your damages.
Interest
FINRA arbitration panels can award pre-judgment interest on your damages, which can be substantial if the fraud occurred years ago.
Punitive Damages
In cases involving egregious or intentional misconduct, arbitration panels have the authority to award punitive damages — amounts above and beyond your actual losses — as a punishment to the broker or firm. These are not guaranteed, but our attorneys actively pursue them in appropriate cases.
Attorney Fees
In certain cases, including those involving statutory fraud claims, you may be entitled to recover your legal fees from the other side. Because we work on contingency, this is an added benefit rather than a necessity.
How the FINRA Arbitration Process Works — Step by Step
The vast majority of investment fraud claims are resolved through FINRA arbitration rather than traditional court litigation. FINRA (the Financial Industry Regulatory Authority) operates a specialized arbitration forum specifically for securities disputes. Here is how the process works:
Step 1: Free Consultation and Case Evaluation. You meet with our attorneys (by phone, video, or in person) and describe what happened. We review your account statements, trade confirmations, and any communications with your broker. We tell you whether we believe you have a viable claim and what we estimate you could recover. This costs you nothing.
Step 2: Filing the Statement of Claim. If we take your case, we file a formal Statement of Claim with FINRA, which initiates the arbitration. The claim describes what happened, the rules that were violated, and the damages you are seeking. The brokerage firm has 45 days to respond.
Step 3: Arbitrator Selection. Both sides review a list of potential arbitrators provided by FINRA and strike or rank them according to preference. FINRA assigns a panel — typically one or three arbitrators depending on the size of the claim — from the remaining names.
Step 4: Discovery. Both sides exchange documents and information. This typically includes brokerage account records, trade confirmations, internal firm communications, email records, and compliance files. Discovery in FINRA arbitration is more limited than in court, which generally speeds the process.
Step 5: Prehearing Conferences and Mediation. Before the final hearing, the parties may participate in a prehearing conference to organize the case schedule. Many disputes settle during this period — FINRA offers a voluntary mediation program that often resolves cases before a full hearing is required.
Step 6: The Arbitration Hearing. This is the equivalent of a trial, but conducted before the arbitration panel rather than a judge and jury. Both sides present evidence, call witnesses, and make legal arguments. Hearings typically last one to five days depending on the complexity of the case. Our attorneys have substantial FINRA hearing experience and know how to present cases persuasively to arbitrators.
Step 7: The Award. FINRA arbitrators issue a written decision, typically within 30 days of the hearing’s close. Arbitration awards are binding and can be enforced in court. FINRA-registered firms are required to pay valid arbitration awards.
How long does FINRA arbitration take? From the date of filing to the final award, most cases take between 12 and 18 months. Simple cases can resolve in 6 to 9 months, particularly if settled before the hearing. Cases involving large amounts or complex facts may take longer.
IMPORTANT: You do not need to navigate this process alone. We handle every step — from the initial filing through the final award. Your job is to give us the information we need. Our job is to do everything else.
Why Patil Law? What Sets Our Investment Fraud Attorneys Apart
We Work Exclusively on Contingency — You Pay Nothing Unless We Win
Investment fraud victims have already lost money. The last thing you need is another bill. Every case we take is handled on a pure contingency fee basis. If we do not recover money for you, you owe us nothing — not a filing fee, not a consultation fee, not a retainer. Our interests are completely aligned with yours.
Over $25 Million Recovered for Investors Nationwide
Since our founding, Patil Law has recovered more than $25 million for individual investors and families who lost money due to broker fraud, brokerage firm negligence, and securities misconduct. Our clients range from retirees who lost their life savings in unsuitable annuities to young professionals who were defrauded through unauthorized trading. View our full case results.
15+ Years Exclusively in Securities and Investment Fraud Law
Our founding attorney, Chetan Patil, has spent more than 15 years focused exclusively on securities fraud and investment loss litigation. He has tried cases against virtually every major Wall Street firm and has represented clients in FINRA arbitration from coast to coast. He is not a generalist who occasionally handles securities cases — this is the only work we do. Read Chetan Patil’s full biography.
We Take On the Largest Firms in the Industry
Many law firms avoid going up against the Merrill Lynches and Morgan Stanleys of the world. We do it regularly. Our attorneys have successfully represented investors against Merrill Lynch, LPL Financial, UBS, Raymond James, Cetera Financial, Equitable Advisors, Osaic Wealth, Wells Fargo Advisors, and dozens of other major brokerage firms. See our brokerage firm investigations.
We Represent International Investors with U.S. Losses
If you live outside the United States but invested in U.S. securities markets, your losses may still be recoverable through FINRA arbitration or U.S. federal court proceedings. We have represented investors from Europe, Latin America, Asia, and Canada in U.S. securities fraud cases and can conduct consultations and proceedings by video conference.
Real Results — Representative Case Examples
The following results are from actual Patil Law client recoveries. All cases resulted in confidential settlements or arbitration awards.
- $5,000,000 recovered — Elder abuse, illiquid REITs, and forgery. Clients were improperly sold multiple unsuitable products without full consent. Recovered in settlement against brokerage firm and its financial advisors.
- $3,525,000 recovered — Excessive trading and unsuitable recommendations. Clients were sold high-risk, illiquid investments inconsistent with their stated objectives. Recovered in confidential settlement.
- $1,200,000 recovered — Misrepresentation and fraud. A group of investors, ranging in age from teenagers to retirees, were defrauded through purchases of illiquid REITs and improper variable annuities.
- $400,000 recovered — Unsuitable products, fraud, and theft. A Mexican family’s assets were stolen with the assistance of the family’s financial advisor. Full recovery achieved in settlement.
- $225,000 recovered — Elder abuse, misrepresentation. Registered investment advisors defrauded retired clients who were sold risky, illiquid REITs falsely marketed as ‘low-risk.’
These are representative examples. Past results do not guarantee a similar outcome in your case. Every claim is different and depends on the specific facts, the applicable law, and the arbitration panel or court involved.
The Time Limit on Your Claim — Do Not Wait
This is the most urgent piece of information on this page: investment fraud claims have time limits, and missing them means permanently losing the right to recover your losses.
Under FINRA’s eligibility rules, claims must be filed within six years of the date of the event giving rise to the claim. However, this is the outer limit, not a comfort zone. Many cases must be filed sooner depending on the state law that applies, the nature of the claim, and when the fraud was discovered.
Additionally, key evidence — brokerage records, communications, internal compliance files — becomes harder to obtain over time. Some documents are legally destroyed after a certain number of years. Acting early gives your attorney the best opportunity to build the strongest possible case.
If you think you may have a claim — even if you are not sure, even if years have passed — call us at 800-950-6553 today. The consultation is free. Do not let a deadline pass while you are still deciding whether to act.
Investment Fraud Legal Representation in All 50 States
Patil Law represents investors in every U.S. state and territory. FINRA arbitration is a federal process, which means claims can be filed regardless of your state’s local court rules. We have actively recovered funds for investors in:
- All other U.S. states — see our nationwide locations page
Your location does not determine whether you have a case. If you invested through a FINRA-registered broker or brokerage firm, your claim goes through FINRA arbitration regardless of where you or the firm is located.
Ready to Talk?
Please reach out to our team so we can privately discuss your situation. We’ll review the facts of your matter and discuss how we can help you. We pride ourselves on always being compassionate and respectful.
Frequently Asked Questions — Investment Fraud
What is investment fraud?
Investment fraud is any deceptive, manipulative, or dishonest practice by a financial professional — including stockbrokers, financial advisors, and investment firms — that results in financial harm to an investor. It includes intentional misconduct like Ponzi schemes as well as negligence-based claims like unsuitable investment recommendations or failure to disclose material risks.
Can I sue my financial advisor for losing my money?
Yes, in many cases. You can bring a legal claim against your financial advisor if their conduct violated FINRA rules, securities laws, or their duty to act in your best interest. You do not need to prove intentional fraud — negligence, unsuitable recommendations, and failure to disclose material information are all viable grounds. Contact our investment fraud attorneys for a free case review to find out if your specific situation supports a claim.
What is FINRA arbitration?
FINRA arbitration is a formal dispute resolution process administered by the Financial Industry Regulatory Authority. It functions similarly to a trial, with both sides presenting evidence and arguments to a panel of neutral arbitrators who issue a binding decision. Almost all brokerage account agreements require disputes to be resolved through FINRA arbitration rather than through the court system.
How long does FINRA arbitration take?
Most FINRA arbitration cases are resolved within 12 to 18 months from the date of filing. Simpler cases, or cases that settle before the hearing, can conclude in as few as 6 to 9 months. Complex, multi-party cases can take 2 to 3 years. Our firm manages the entire process so that delays are minimized on our end.
What is the statute of limitations for investment fraud?
Under FINRA's eligibility rules, arbitration claims must be filed within six years of the event giving rise to the claim. However, applicable state law and the specific nature of your claim may impose shorter deadlines. For example, some securities fraud claims must be filed within 2 to 3 years of when you discovered — or should have discovered — the fraud. Given these complexities, you should consult with an investment fraud attorney as soon as possible rather than assuming you have time.
What does it cost to hire an investment fraud lawyer?
At Patil Law, we handle every investment fraud case on a contingency fee basis. This means you pay absolutely nothing unless we win — no upfront retainer, no hourly fees, no filing costs. Our fee is a percentage of what we recover for you. If we do not win, you owe us nothing. This structure ensures that we only take cases we genuinely believe in, and it aligns our interests completely with yours.
What is churning in investing?
Churning refers to excessive buying and selling of securities in a client's account by a broker, primarily for the purpose of generating commissions rather than benefiting the investor. It is a violation of FINRA Rule 2111 and can cause significant financial harm, particularly in accounts where commissions are charged on each trade. Signs of churning include a high number of transactions relative to your account size, large commission charges, and poor performance despite market gains.
What is unauthorized trading?
Unauthorized trading occurs when a broker executes trades in a client's brokerage account without the client's prior authorization. Unless you have specifically given your broker discretionary authority in writing, every trade requires your explicit approval. Unauthorized trading is a serious violation that can support claims for all resulting losses, plus damages.
How do I know if my investment was unsuitable?
An investment is considered unsuitable if it is inconsistent with your age, financial situation, investment goals, and risk tolerance. For example, putting a 70-year-old retiree's savings into speculative growth stocks is typically unsuitable. FINRA's Regulation Best Interest (Reg BI) and predecessor suitability rules impose a legal obligation on brokers to only recommend products that are appropriate for their specific client. If a broker recommended an investment you did not understand and could not afford to lose, it may have been unsuitable.
What should I do if I suspect investment fraud?
First, gather all documents you have — account statements, trade confirmations, emails or texts with your broker, and any marketing materials you were given. Do not confront your broker directly, as this can alert them and complicate your case. Second, contact an investment fraud attorney for a free consultation. We will review your records, give you an honest assessment of your situation, and explain your options. The sooner you act, the better your chances of recovery.
Can I recover my losses if the brokerage firm is out of business?
Possibly. FINRA arbitration awards can be enforced against brokers personally, not just firms. In addition, the Securities Investor Protection Corporation (SIPC) provides limited coverage when brokerage firms fail — up to $500,000 per customer, including up to $250,000 in cash. If the firm was solvent when the fraud occurred but has since closed, we can advise on your specific recovery options.
What if I signed an arbitration agreement?
Nearly all brokerage account agreements include mandatory arbitration clauses. This is standard in the industry and does not prevent you from pursuing your claim — it simply means your claim will be handled through FINRA arbitration rather than through the court system. Our attorneys are highly experienced in FINRA arbitration and in many cases prefer it because it is faster and less expensive than federal court litigation.
Do I need an attorney for FINRA arbitration?
You are not legally required to have an attorney, but we strongly advise against proceeding without one. Brokerage firms are represented by experienced securities defense lawyers who handle these cases full-time. They know FINRA's procedural rules, evidentiary standards, and arbitrator selection strategy. Going up against them without representation significantly reduces your chances of recovery. Our contingency fee structure means there is no financial reason to represent yourself.
Contact Our Investment Fraud Attorneys — Free, Confidential Consultation
If you lost money due to broker fraud, unsuitable investments, unauthorized trading, or any other form of investment misconduct, Patil Law is ready to help. Our investment fraud attorneys will review your situation at no cost, give you an honest assessment, and tell you exactly what your options are.
You have nothing to lose by calling. You may have everything to gain.
Call us: 800-950-6553 | Email: cp@patillaw.com | Or complete our secure contact form.
We represent investors in all 50 states. We offer consultations by phone, video, or in person at our Los Angeles office. Se habla español.