A lot of things can go wrong when you handle other people’s money. It is no wonder securities traders, financial advisers, and the firms that employ them are frequent targets of litigation from former clients. Whether the accusation has merit or not, the financial professionals who are named in the suit may require legal representation from a business attorney. That goes double when the case involves one of the following watchdog groups.

The SEC

From Junk Bond King Michael Milken to TV personality Martha Stewart, the U.S. Securities and Exchange Commission (SEC) has been involved in some of the most notorious securities misconduct cases in history. As an agency of the federal government, the SEC has the power to bring civil or criminal charges against investors and brokers alike. When a financial professional receives a call or a visit from a representative of the SEC, he would be well-advised to contact an experienced business attorney as soon as possible.

FINRA

Because it is a private organization that does not have the power to charge broker-dealers in court, the Financial Industry Regulatory Authority (FINRA) is not quite as threatening as the SEC. However, the group does have the authority to investigate accusations of broker misconduct and, should the evidence prove compelling, order them to arbitration.

Individual States

All U.S. states have their own securities divisions that handle customer complaints and register securities that will be sold within the borders of that state. These often small state divisions can also get in contact with much larger regulatory agencies like the SEC if a complaint is credible.

Types of Broker Misconduct

When an investor files a complaint with one of the aforementioned agencies, it often falls into one of the following categories:

– Excessive trading: Also known as churning, this illegal practice is used by unscrupulous traders to generate commission fees through buying and selling that is not in the best interest of the client.

– Unauthorized trading: Just as it sounds, unauthorized trading occurs when a broker makes trades on an account its owner did not approve.

– Misrepresentation/Omission: When a trader omits vital facts or simply lies about an investment he recommends to a client, he may be guilty of this crime.

– Negligence: Although somewhat open to interpretation, a trader may be charged with negligence if he knowingly failed to protect his client from risk of financial harm.

Why Call a Business Attorney?

Whether you are liable or not, odds are you’ll be anxious and afraid after being accused of broker misconduct. After all, these kinds of claims are serious business. Traders have lost their jobs, their licenses, even their freedom. It is also important to note that even if you are exonerated, these accusations can follow you around for the rest of your career. The only way to clear your name is to hire a reputable attorney who knows the law inside and out.

The Process

Depending on which regulatory group files charges against you, you could be headed to court or to an arbitration process. Whether a civil, criminal, or administrative case, the opposition may marshal teams of lawyers and regulatory officials to question you about the allegations. Even if you have absolutely nothing to hide, it is imperative that you retain legal counsel before you answer questions or testify in court.

An experienced business attorney will make certain you put your best face forward and avoid making any statements that may compromise your case.