Today broker-dealers are under constant fire. The pressure comes from various sources: (i) the industry wanting to ensure investors they are being protected; (ii) FINRA enforcement investigations; and (iii) clients demanding positive returns regardless of the trading strategy they selected and approved.
Firms today must be aggressive, and such aggressiveness must begin on day one. This day is not when a firm receives a customer complaint, but rather, the day the investor becomes a customer of the firm.
From the brokers, supervisors and back office personnel, everyone must be on the same page realizing that every ordinary act required in the opening and continuing of an account can prove to be crucial in defending the firms. The simplicity of the acts is often overlooked. For example, make sure account documentation is properly completed. Client contact with the firm should be documented on a daily basis. (Brokers often complain about the time it takes to scribble the notes. Compare that time to working with defense counsel and spending three to five days at an arbitration hearing. Suddenly the 30 seconds becomes very worthwhile.) Also, supervision of brokers, such as documenting the comparison of investors’ trading to trading objectives, will provide a layer of protection if, and when, necessary.
The Law Offices of Barry M. Bordetsky works with brokers and broker-dealers when faced with both customer complaints and regulatory issues from FINRA. If you have questions, please reach out to Barry M. Bordetsky at (800) 998-7705 or email@example.com