Frequently Asked Questions » Sonn Law Group

General FAQs

1. What services does Sonn Law Group offer?
Sonn Law Group offers comprehensive legal services focused on protecting investors and consumers. Our primary practice areas include:

Securities Fraud: We represent investors who have suffered losses from misconduct by brokers, financial advisors or investment firms.
Investment Loss Recovery: Our team helps clients recover funds lost through various forms of investment fraud or mismanagement.
Class Action Lawsuits: We represent groups of investors affected by large-scale fraud or misconduct.
Insurance Claims: Our attorneys assist clients with complex insurance claim disputes.
FINRA Arbitration: We have extensive experience representing clients in arbitration proceedings involving the Financial Industry Regulatory Authority (FINRA).
Business Litigation: We represent individuals and companies in business disputes.
Real Estate Litigation: We represent individuals and companies with commercial real estate disputes and brokerage commission disputes.

We are committed to ethical and responsible legal representation. Our approach is aggressive yet principled, always prioritizing our client’s best interests. We take on cases against even the largest investment firms, fighting tirelessly to seek justice and compensation for our clients.

2. Who can benefit from Sonn Law Group’s services?
Sonn Law Group’s services are designed to benefit a wide range of clients who have experienced financial losses or been victims of fraud. Our clients typically include individual investors, retirees and high-net-worth individuals who have suffered losses from various forms of financial misconduct. We also represent insurance claimants in disputes with insurance companies and groups of investors in class action lawsuits.

Our team can provide expert legal assistance if you’re facing issues related to broker misconduct, unsuitable investments, Ponzi schemes, unfair business practices and more.

Examples of situations where our legal assistance might be needed include:

An investor discovers their broker has been making unauthorized trades in their account.
A retiree realizes their life savings were invested in high-risk securities unsuitable for their financial situation.
An individual suspects they’ve fallen victim to a Ponzi scheme.
A group of investors learns that a company they invested in provided false or misleading information.
A policyholder’s legitimate insurance claim is denied or significantly underpaid.

If you’ve experienced substantial investment losses, suspect fraud or face a complex legal dispute related to your finances or insurance, Sonn Law Group is here to help. We offer free consultations to discuss your case and determine the best course of action.

Securities Fraud FAQs

1. What is securities fraud?
Also known as investment or stock fraud, securities fraud involves deceptive practices in the securities markets that mislead investors and manipulate financial markets. At Sonn Law Group, we’ve seen many forms of securities fraud, including:

Sale of investments not in the customer’s best interests.
Sale of unsuitable investment strategies.
Ponzi and pyramid schemes
High-yield (junk) investment frauds
Structured notes losses
Private Placement fraud
NonTraded REIT fraud
Promissory note fraud
Unregistered Securities
Sales of Securities by Unlicensed Salespeople (such as insurance agents selling securities without a securities license)
Annuity fraud
Misrepresentation and fraud
Negligence
Breach of fiduciary duty
Mismanagement of “managed accounts”
Aiding and abetting fraud
Vulnerable adult and exploitation of the elderly in their investments, including theft and forgery
Misrepresentation on SEC filings

The impact of securities fraud extends beyond individual investors. It erodes trust in our financial markets and can destroy the value of your hard-earned investments. If you suspect you’ve been a victim of securities fraud, it’s crucial to act quickly to protect your rights and potentially recover your losses.

2. How can I identify if I’ve been a victim of securities fraud?
Recognizing the signs of securities fraud is the first step in protecting yourself. Be on the lookout for these red flags:

Promises of high returns with little or no risk
Pressure to make quick investment decisions
Unsolicited investment offers by unlicensed persons who pretend to be “financial advisors” but have no license (use BrokerCheck to find out)
Inconsistent or vague information about the investment
Difficulty receiving payments or cashing out investments

If you notice any of these warning signs, don’t ignore them. Your financial future may be at stake. Take these steps immediately:

Consult with a securities fraud attorney
Document all communications and transactions related to the investment
Contact your broker or financial advisor for clarification in writing
Report your concerns to your state securities regulator (e.g. Division of Securities) the SEC or FINRA

Sonn Law Group has successfully represented clients in securities fraud cases for the past four decades. Don’t hesitate to reach out if you have any suspicions — we’re here to help protect your investments and rights.

3. What should I do if I suspect securities fraud?
If you suspect you’re a victim of securities fraud, time is of the essence. Here are the immediate actions you should take:

Contact a securities lawyer asap.
Cease all further investments or transactions.
Fire your advisor and move your money to a new advisor.
Gather and secure all relevant documents and communications.
File a complaint of the suspected fraud to regulatory authorities (state securities regulator, SEC, FINRA).

Most importantly, consult with an experienced securities fraud attorney immediately. A skilled attorney can:

Evaluate the strength of your case
Create a strategy
Guide you through the complex legal process
Help recover your losses through arbitration or litigation
Protect your rights and interests throughout the proceedings

Remember, you’re not alone in this fight. There are experienced securities fraud attorneys, like those at Sonn Law Group, who specialize in navigating these complex cases. We can stand up to large financial institutions and work tirelessly to seek justice on your behalf.

Stockbroker FAQs

1. What constitutes stockbroker negligence?
Stockbroker negligence occurs when a broker fails to meet the standard of care expected in managing a client’s investments. Common examples include:

Failing to recommend investments in the customer’s best interests
Failing to diversify a client’s portfolio
Too much concentration in one investment or strategy
Too many private investments (investments not traded on any national securities exchange that are easily liquidated)
Unauthorized trading
Excessive or frequent trading (aka churning)
Use of margin (borrowing money against your investments)
Misrepresenting or omitting material information about investments
Failing to conduct adequate research on recommended investments
Constantly reassuring the customer to hold onto investments without valid justification (e.g., saying ‘hold on,’ ‘they always come back,’ or ‘don’t worry about it’)

Negligence can result in significant financial losses for investors. If proven, victims may be entitled to compensation through arbitration or litigation. Brokerage firms can also be held liable for failing to supervise their brokers properly.

2. How do I prove my stockbroker was negligent?
To establish a case of stockbroker negligence, you need to demonstrate three key elements:

Duty of Care: The broker was responsible for acting in your best interests.
Breach of Duty: The broker failed to meet the expected standard of care (e.g., unsuitable recommendations, unauthorized trading).
Causation and Damages: The broker’s actions resulted in your financial losses.

To support your claim, you should gather:

All written communications with your broker (emails, letters, texts)
Notes from phone conversations or meetings
Marketing materials or investment prospectuses provided by the broker
Expert testimony from financial professionals on industry standards
Account statements showing transactions and performance

The claims process typically involves:

Consulting with a securities attorney
Filing a complaint with FINRA
Participating in a final evidentiary hearing in arbitration
Attempt to settle the case via voluntary, non-binding mediation

Remember, the burden of proof is on you as the investor to demonstrate that the broker’s negligence caused your losses. Given the complexity of these cases, working with an experienced securities attorney can significantly strengthen your claim and improve your chances of recovery.

3. What are CRD numbers, and why are they important?
Central Registration Depository (CRD) numbers are unique identifiers for every registered broker and brokerage firm. You can look up your financial advisor at Brokercheck.org. The CRD report of the financial advisor’s history is important because:

They allow investors to verify a broker’s registration and licensing status
They provide access to a broker’s employment history, qualifications and disciplinary records
They ensure transparency and accountability in the securities industry

Investors can use CRD numbers to research brokers through FINRA’s BrokerCheck tool. This free service provides detailed information about a broker’s background and any reported issues, helping investors decide who handles their investments. Note, this website often omits information that FINRA does not disclose. See, eg
https://www.slcg.com/resources/blog/668

Investment Fraud FAQs

1. What are the common types of investment fraud?
Common types of investment fraud include:

Misrepresentation: The financial advisor misrepresented the risk of the investment or omitted to disclose important facts.
Breach of Fiduciary Duty: The financial advisor chose high-commission products or products not in the best interests of the customer.
Excessive Trading: The financial advisor frequently trades in the account, unnecessarily putting the customer’s savings at risk.
Ponzi Schemes: Using new investors’ money to pay returns to earlier investors.
Promissory Notes Fraud: Selling fake or misrepresented IOUs.
Theft: The advisor steals the client’s money.
Vulnerable Adult or Elderly Exploitation: The advisor befriends the customer and then unduly influences them to give gifts, make loans or allow them to use their credit or debit cards. The advisor may even position themselves as a beneficiary of the customer’s will, trust, annuity or life insurance or take on roles like serving as the estate’s personal representative for their own benefit.
Fraudulent statements: The financial advisor creates “custom” or “fake” statements not created by the brokerage firm to cover up a fraud or crime.
Options Fraud: Misleading investors about trading options.
Structured Notes Fraud: The advisor sells structured notes to the customer as safe and with little risk, though they may carry significant risk.

Warning signs include high-pressure sales tactics, promises of guaranteed high returns with little risk and lack of transparency. To protect yourself, always research investments thoroughly, be skeptical of unsolicited offers and verify the registration of both the investment and the seller with regulatory bodies.

2. How can I recover losses from investment fraud?
If you’ve been a victim of investment fraud, take these steps to recover your losses:

Consult with a securities lawyer to explore legal options, including arbitration or litigation.
Report the fraud to regulatory authorities like the SEC and FINRA.
File a complaint with your state securities regulator.

Securities lawyers play a crucial role in the recovery process. They can help gather evidence, file claims and represent you in legal proceedings to maximize your chances of recovering losses.

3. What is the role of the SEC and FINRA in protecting investors?
The Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA) work to protect investors and maintain market integrity:

SEC: Enforces federal securities laws, regulates the securities industry and oversees securities exchanges to prevent fraud.
FINRA: Regulates brokerage firms and brokers, enforces industry standards and provides dispute resolution services through arbitration and mediation.

Both organizations aim to prevent and address investment fraud, ensuring a fair and transparent market for investors. They investigate fraudulent activities, impose sanctions on violators and provide resources to help investors make informed decisions.

FINRA Arbitration FAQs

1. What is FINRA arbitration?
FINRA arbitration is a dispute resolution process administered by the Financial Industry Regulatory Authority to resolve conflicts between investors and brokerage firms or brokers. Key features include:

Faster resolution than traditional court litigation (typically 12-24 months)
Generally more cost-effective due to lower legal fees and limited discovery
Less formal, with more flexible rules of evidence and procedure
Results in a binding decision with limited grounds for appeal
Private proceedings, unlike public court cases
Arbitrators act as the jury and receive at least some training of the process from FINRA

FINRA arbitration offers a streamlined alternative to court litigation for resolving investment-related disputes.

2. How does the FINRA arbitration process work?
The FINRA arbitration process involves several key stages:

Filing a Claim: Start the process by submitting your complaint to FINRA. This includes explaining your dispute in detail, specifying what you’re seeking as compensation and agreeing to FINRA’s rules. There is a filing fee, but that is normally paid by the attorney who is working on a contingency.
Answering the Claim: Respondents have 45 days to file an answer, including relevant facts and defenses.
Arbitrator Selection: Parties choose neutral arbitrators from a FINRA-generated list. Both sides can strike and rank arbitrators.
Prehearing Conferences: These conferences set the case schedule and address procedural matters. They include an initial conference and possibly additional ones as needed.
Discovery: Exchange relevant documents and information. More limited than court discovery, focusing on essential evidence.
Hearings: Present evidence and arguments similar to a trial. This includes opening statements, witness testimony and closing arguments.
Decision: Arbitrators issue a binding written decision within 30 business days of the hearing, which includes any awarded damages and costs.

Throughout this process, both parties can present their cases and work towards resolving the dispute. The entire process typically takes 12-16 months.

3. What are the costs associated with FINRA arbitration?
FINRA arbitration involves several types of fees and potential costs:

Filing Fees: Vary based on the claim amount, from a few hundred to several thousand dollars.
Hearing Session Fees: Additional fees for each hearing session, which are also based on the claim amount.
Attorney Fees: Costs for legal representation, which can vary widely.
Other Costs: These may include expenses for expert witnesses, document production and travel.

Some attorneys, including Sonn Law Group, offer “no recovery, no fee” arrangements. This means you only pay legal fees if your case is successful. We also may advance certain costs and expenses of the case in some situations.

While FINRA arbitration is generally less expensive than court litigation, it’s crucial to consider all potential costs when deciding whether to pursue a claim. We recommend discussing fee structures and potential costs with your attorney before proceeding with arbitration.

Contact Us for a Free Consultation

If you’ve suffered investment losses or suspect fraud, don’t face it alone. Sonn Law Group offers a free consultation to discuss your case and explore your options. Our decades of experience and commitment to ethical representation allow us to fight for your rights and seek the compensation you deserve.