Securities Industry Litigation

The securities industry operates in a highly regulated environment, and its legal advisors must remain abreast of changes in business and regulatory climates. We recognize the nuances singular to the securities industry and deliver advice accordingly. Polsinelli’s securities industry attorneys not only provide tailored legal perspective and representation, but also identify opportunities and risks.

Our Securities Industry practice successfully represents broker-dealers and financial advisors in FINRA arbitrations on a variety of claims, including:

• Raiding
• Broker movement
• Protocol for Broker Recruiting compliance
• Misappropriation of confidential customer and business information
• Repayment of forgivable loans
• Churning
• Breach of fiduciary duty
• Suitability
• Fraud involving a wide range of investment products, including collateralized mortgage obligations, non-traditional ETFs, and residential mortgage backed securities

Polsinelli was early to recognize the shift in the securities industry from the traditional broker dealer model to the independent registered investment advisor or hybrid model. We understand the RIA business model and can advise RIAs on regulatory compliance, customer issues and employment matters. 

In addition, Polsinelli has significant experience advocating for broker dealers and RIAs in investigations by the Securities and Exchange Commission, FINRA and state securities commissions in various types of cases, including:

• Market manipulation
• Insider trading
• Fraud
• Failure to supervise
• Recommendation of non-traditional ETFs to customers
• Trading away
• Failure to maintain adequate capital
• Other state and federal statutory or rule violations

As a national law firm with a broad geographic footprint, Polsinelli is well-positioned to assist companies in litigation matters which may arise in state and federal courts across the United States. We have handled matters FINRA arbitrations, SEC, FINRA and state securities commission investigations, and state and federal lawsuits in 21 states.

• Defended broker-dealer in FINRA case involving raiding claim in which broker dealer in Bozeman, Montana hired 95 percent of a competitor’s branch office. After two-week arbitration, claimant received less than 20 percent of damages claimed.
• Defended broker-dealer in FINRA case involving raiding claim where broker dealer in Cedar Rapids, Iowa hired 95 percent of a competitor’s branch office. Claimant settled for less than 10 percent of demand.
• Obtained preliminary injunction in Maricopa County, Arizona District Court against former broker who violated the Protocol for Broker Recruiting when he changed firms.
• Successfully defended broker dealer against customer fraud suit in five-day jury trial in District Court for the City and County of Denver, Colorado.
• Defense verdict in favor of a broker-dealer and one of its employees on fraud and breach of fiduciary duty claims arising from the recommendation of an investment strategy to multiple plaintiffs. This securities fraud case was resolved by FINRA arbitration in Raleigh, North Carolina.
• Secured a defense verdict in favor of a broker-dealer and one of its officers on fraud claims arising from the purchase of collateralized mortgage obligations by an FDIC-insured bank. This securities fraud case was resolved by FINRA arbitration in Los Angeles, California.
• Successfully defended a NASDAQ-listed company against state and federal securities fraud claims based in part on alleged accounting improprieties. Defense verdict after a one-week arbitration in which the claimants sought more than $5 million in damages. This securities fraud case was resolved via the American Arbitration Association.
• Successfully represented a broker-dealer in a case alleging failure to properly execute an investment strategy known as “selling short against the box.”
• Obtained preliminary injunction in state court against a financial advisor who violated the Protocol for Broker Recruiting when he changed firms.
• Successfully represented broker-dealers in cases involving failure to supervise branch office.