Author Archives: Barry M. Bordetsky, Esq.

The Starting Point Is Now

05 Monday Jan 2015

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It’s the New Year, what is undeniably the greatest false start time of the year. People use the date as a starting point for something, whether it be starting a new hobby, starting a new business or simply reconnecting with old friends.

For investors, this is the time when they will be receiving a year-end statement from their broker-dealers. Often times this is the document provided to accountants from clients, to assist with the calculation of gains and losses for tax purposes.   For accountants, like the diet that your clients were always wanting to start but never did, many times investing clients are overwhelmed with the investing process and did not pay attention to their investment accounts as closely as they should have during the year. Now is as good a time as any for accountants to address the issue with their clients.

Upon receipt of the clients’ trading information, accountants may want to call their clients and pose the following form of questions: Tell me what you wanted to do with your account? What did your broker tell you before the trades took place? How many trades do you think took place in the account?

The answers to these questions will be very telling, the start of an understanding of what took place in the account. By way of example, if the client states she wanted the account to conservatively sit and grow with no activity, but there were thirty trades over the year, there is an explanation that should be received as to why the trades took place. Similarly, if the trading was unsuitable, or not in line with the client’s objectives (i.e., risk level, financial wherewithal, experience), then a stop should be put to the improper trading. Importantly, the suitability analysis takes place at the time of the trades, not at the time of the complaint, thus necessitating an immediate review of the trading.

On that note, unless the account is discretionary, brokers are required to speak to investors and receive specific authorization for every trade, buys and sells. If this did not happen, then there is a problem. In terms of the number of trades that took place, there comes a time when the trading in the account only makes money for one person – – and that is the broker. However, if the investor sits for years silently, riding the profits of the trading in the account and then complains years after the fact, such complaint may very well be looked at suspiciously as only a belated attempt to utilize the broker-dealer as an insurance company for market losses. By sitting silently, the investor may very well be waiving the ability to move forward on a viable claim. An investor has six years to file an arbitration claim against a broker before the Financial Industry Regulatory Authority (“FINRA”).

The New Year is a great time for accountants to work with clients and provide them with the necessary nudge to protect their investments.

The Law Offices of Barry M. Bordetsky represents customers and industry representatives in FINRA securities and employment arbitrations as well as litigants before state and federal courts. If you have questions about an issue you are involved with, please contact Barry Bordetsky at (800) 998-7705 or email barry@bordetskylaw.com.

Dodd-Frank Dilemma: Protect Yourself or Your Company?

30 Tuesday Dec 2014

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If you have been fired because you informed your supervisor or human resource department that your employer (or other employees) has violated securities laws, before filing a whistleblower complaint under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank”), there is one critical point that is required before the filing of the complaint: you must have reported the violation to the Securities and Exchange Commission (“SEC”).   The issue was recently clarified before the federal court located in the Southern District of New York in the case Daniel Berman v. Neo@Ogilvy LLC and WPP Group USA Inc., 1:14-cv-523-GHW-SN (S.D.N.Y. Dec. 5, 2014).

Relying upon a Fifth Circuit Court of Appeals case (while also disagreeing with a New York federal decision), the court made it clear the plain language in Dodd-Frank creates a private cause of action for those employees retaliated against by their employers only if the employee had informed the SEC of the alleged securities violation. This decision will inevitably create a delay in reporting by an employee to an employer, and that could very well preclude the employer from putting a stop to the improper actions of a fellow employee who is violating the securities laws.

The employee discovering the securities violation must take a moment and consider the ramifications of who is first informed of the violation. Without informing the SEC, the former employee will not have a viable Dodd-Frank whistleblower claim. Conversely, to employers in New York, your employees will not be immediately helping to resolve a problem without taking the time to first protect themselves.   This will delay any internal investigations, delay the stopping of improper behavior by employees who are violating securities laws and inevitably invite an examination by the SEC.

The Law Offices of Barry M. Bordetsky represents customers and industry representatives in FINRA securities and employment arbitrations as well as litigants before state and federal courts. If you have questions about an issue you are involved with, please contact Barry Bordetsky at (800) 998-7705 or email barry@bordetskylaw.com.

A Moment of Thought Is Worth Your Weight In Gold

23 Tuesday Dec 2014

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In the midst of this holiday season, we take the time to celebrate the good: family, friends, business and the thoughts of improving on the prior year.  This is a time when many will put aside differences and enjoy the holiday spirit.

Before we blink the holidays will be a fleeting memory, and many will return to the work ahead. Good thoughts and wishes will be replaced with disdain and anger over something someone did or did not do, such as a failure to do something promised, failure to pay for a good or service rendered, or a realization that you were lied to in the course of a transaction. There are instances where the filing of a complaint is necessary, sometimes even utilizing an expedited court procedure to protect your interests from those seeking to harm you, financially or otherwise.

Before you jump into the litigation fray, take a moment. Understand the consequences of a filing, from both a financial and personal standpoint.  A lawsuit can cost tens of thousands of dollars with no guarantee that you will get what you’re looking for with the filing.  Similarly, the time involved in a lawsuit (away from your work and family) and the associated stress can be just as draining as the financial costs.  Take the time to think about what you want to do and talk with your lawyer about the entirety of the process.  Often times, a lawyer can work with you to resolve the issues without the need for a filing with the court.  

The Law Offices of Barry M. Bordetsky represents customers and industry representatives in FINRA arbitrations as well as litigants before state and federal courts. If you have questions about an issue you are involved with, please contact Barry Bordetsky at (800) 998-7705 or email barry@bordetskylaw.com.

FINRA Arbitration Requirement Is On Its Deathbed

25 Monday Aug 2014

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What a difference a couple of years can make.

When a stockbroker joins a firm the broker is required to register with the Financial Industry Regulatory Authority (“FINRA”). To do so he must complete and sign a Uniform Application for Securities Industry Registration or Transfer Form U-4 (“Form U-4”). The document contains an arbitration clause, in which the broker agrees to “arbitrate any dispute, claim or controversy that may arise between me and my firm, or a customer, or any other person . . .”

Often times when a broker joins a firm the broker receives a bonus in the form of a forgivable loan. This loan is documented by a promissory note or loan agreement which identifies the repayment terms. Disputes arising from defaults of such loans must be arbitrated. Indeed, the arbitration requirement, in addition to the language in the Form U-4, is mandated and codified by FINRA’s Code of Arbitration (“FINRA Code”) that requires “a dispute must be arbitrated under the [FINRA Arbitration] Code if the dispute arises out of the business activities of a member or an associated person and is between or among: Members; Members and Associated Persons; or Associated Persons.” FINRA Code Rule 13200. FINRA’s interpretive material deems it a violation of its rules and “conduct inconsistent with just and equitable principals of trade” for a member firm to require brokers to waive the arbitration requirement. FINRA IM 13000.

This arbitration requirement was recently enforced in 2012, when Merrill Lynch was fined $1,000,000. The firm attempted to skirt the arbitration requirement by utilizing a third party non-FINRA entity to issue the bonus checks, or forgivable loans to Merrill Lynch’s brokers. Merrill Lynch tried to circumvent the arbitration requirement by having the non-FINRA entity include a forum selection clause requiring any and all disputes relating to the loan to be filed before the New York Supreme Court, New York County.

By its fine to Merrill Lynch, FINRA was letting member firms know it would not tolerate firms failing to comply with the mandated arbitration requirement (and avoid paying FINRA the member charges for the arbitration). It was a shot heard around the securities industry world.

The recent decision of the United States Supreme Court of Appeals for the Second Circuit (“Second Circuit”) in Goldman Sachs & Co. v. Golden Empire Sch. Fin. Auth., No. 13-797-cv (2d Cir. Aug. 21, 2014) and Citigroup Global Mkts. Inc. v. N.C. E. Mun. Power Agency, No. 13-2247-cv (2d Cir. Aug. 21, 2014), which confirmed two lower court federal decisions, has now muted that shot. The decision has far reaching implications with FINRA and will test the regulatory entity’s wherewithal. The Second Circuit’s ruling that member firms may utilize forum selection clauses that supersede FINRA’s arbitration requirements opens a gateway of opportunities for firms to sidestep arbitration as it relates to loan agreements with brokers. By way of example, had the decision been in effect in 2012, it appears all Merrill Lynch needed to do to avoid mandatory arbitration was include a forum selection clause in its promissory notes or loan agreements requiring any and all disputes for any actions or proceedings regarding the note to be filed before the New York Supreme Court, New York County. What a difference two years makes!

It will be interesting to see if FINRA utilizes its enforcement authority to fine Goldman and Citibank for avoiding the arbitration requirement, and counter the ruling in one way or another. Will FINRA take the position that the Second Circuit (and corresponding Ninth Circuit) decision does not apply to the internal rules of the entity? If FINRA does not act, it will confirm to firms that the longstanding arbitration requirement in the FINRA Code is on its deathbed.

The Law Offices of Barry M. Bordetsky represents customers and industry representatives in FINRA arbitrations as well as before state and federal courts. If you have questions regarding the process, please contact The Law Offices of Barry M. Bordetsky by calling Barry Bordetsky at (800) 998-7705 or email barry@bordetskylaw.com.

FINRA Members Must Be Careful What They Ask For

22 Friday Aug 2014

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The United States Supreme Court of Appeals for the Second Circuit (“Second Circuit”) handed down a decision yesterday permitting Financial Industry Regulatory Authority (“FINRA”) members to avoid arbitration by including in an agreement with a customer a forum selection clause requiring “all actions and proceedings” related to a transaction between the parties to be brought in court. Goldman Sachs & Co. v. Golden Empire Sch. Fin. Auth., No. 13-797-cv (2d Cir. Aug. 21, 2014) and Citigroup Global Mkts. Inc. v. N.C. E. Mun. Power Agency, No. 13-2247-cv (2d Cir. Aug. 21, 2014)

Hello Sword of Damocles.

The decision on its face may be held as a victory by Goldman and other banks, just as Dionysius surely felt the victory of being able to switch places with his king, Damocles. By enforcing the forum provision, the banks are now able to litigate within the court system, utilizing the process to delay the normal year-long process of an arbitration to what will be years tied up in litigation. For those litigants that do not have the wherewithal to finance the dispute, banks will use their vast resources to challenge the litigant’s resolve with multiple motions followed by significant discovery costs.

But beware of the horse string. For those litigants with the resolve and financial ability to withstand a court case, they hold a threat for the banks. Unlike an arbitration that is a private proceeding, where arbitration awards do not carry the weight of a precedential decision that a subsequent arbitration panel must follow, banks are taking a significant risk litigating matters that ordinarily would be private and before FINRA.

Take the discovery process, by way of example. In a FINRA proceeding, discovery is limited. Interrogatories and depositions are rarely permitted. Sworn statements by parties are not asked for or required in the discovery process, but only at the hearing on the merits. Conversely, in a court proceeding, the banks will be subject to submitting sworn statements from the outset of the proceedings. Smart plaintiff’s counsel will file verified complaints, requiring verified answers. Interrogatories will be served, again requiring a verification as to the truthfulness of the responses. Thereafter bank employees will be required to sit for depositions. A deposition is an oral examination of a witness after the witness is sworn in – – the testimony at a deposition carries the same weight as testimony at a trial. Also, banks will be subject to court discovery orders.

The peril of the recent decision is that plaintiffs’ counsel may very well be able to utilize these sworn statements obtained in the first case won for every other case filed on the same issue. And here is the nightmare for the banks: the moment a decision is rendered against a bank, that decision, unlike an arbitration award, is publicly available. Every litigant with similar facts will utilize the decision, with precedential value, to the detriment of the banks.

In a day and age when Wall Street is not the most popular street in America, one would think the last thing the banks would want is the public gaining access to these proceedings.

The Law Offices of Barry M. Bordetsky represents customers and industry representatives in FINRA arbitrations as well as before state and federal courts. If you have questions regarding the process, please contact The Law Offices of Barry M. Bordetsky by calling Barry Bordetsky at (800) 998-7705 or email barry@bordetskylaw.com.

Don’t Ignore FINRA Arbitrator Bias

05 Tuesday Aug 2014

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When an investor sues his/her broker, a brokerage firm sues another brokerage firm, or a broker sues or is sued by his former employer, those disputes are arbitrated before the Financial Industry Regulatory Authority (“FINRA”).

There are unfortunate instances during such arbitrations where a bias or prejudice of an arbitrator will show, either in the course of discovery, motion practice or during the hearing on the merits. In such a situation, it is critical for a party to proceed cautiously but appropriately act to protect his/her/its interests. FINRA provides avenues for a party to take when an arbitrator openly demonstrates partiality or a bias in favor of or against a party.

FINRA Rule 12406 provides a procedure to remove the arbitrator before a hearing on the merits has commenced. A party may file a motion to have an arbitrator recused, or removed, due to obvious bias or prejudice. But be aware, FINRA Rule 12406 requires the motion to be direct to and decided by the very arbitrator who is subject to the motion. While this process may sound odd and impractical, it is one followed by most courts in the county.

If the arbitrator denies the motion for recusal, maintains his/her position on the arbitration panel and continues his/her biased and prejudicial behavior, a party has one remaining option, found in FINRA Rule 12407(a). This rule permits a party to file a motion before the first hearing day to challenge an arbitrator for cause. A challenge for cause will be granted where it is reasonable to infer, based upon evidence presented in the motion, the arbitrator is biased or lacks impartiality. Unlike a recusal motion, a motion to challenge an arbitrator for cause is ruled upon by the FINRA staff.

When filing either or both such motions, the filing is critical not only to the fairness of the arbitration process, but for what happens next. If the arbitrator remains on the panel, there is an inevitability as to the outcome: an award is rendered against you that falls in line with the arbitrator’s past behavior. There is one remaining course to take, move before a court to vacate the award. In most jurisdictions a motion to vacate an arbitration award on the grounds of arbitrator prejudice or bias will only be granted if the moving party objected to the arbitrator’s behavior during the arbitration process. If this objection is not asserted during the course of the arbitration, courts may rule the party waived the objection and cannot move to vacate on such grounds.

There is a reality that must be faced when making a motion pursuant to FINRA Rules 12406 and 12407(a): if an arbitrator is acting in an outwardly biased or prejudicial manner to you during the arbitration, a motion to recuse or challenge for cause could seal the decision against you. If the outcome is inevitable based upon the arbitrator’s conduct, it is critical you preserve your right to vacate the arbitration award so the improper acts of the arbitrator will not have a lasting effect on you or your case.  Better to have an angry arbitrator than an award rendered against you.

The Law Offices of Barry M. Bordetsky represents customers and industry representatives in FINRA arbitrations as well as before state and federal courts on motions to vacate an arbitration award. If you have questions regarding the process, please contact The Law Offices of Barry M. Bordetsky by calling Barry Bordetsky at (800) 998-7705 or email barry@bordetskylaw.com.

Treat Your Brokerage Account Like Your Car? Absolutely.

01 Friday Aug 2014

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Believe it or not, your car provides a perfect analogy of how you should handle your investment account and the broker working with you. Most people have little if any knowledge of cars or how they work. Similar to how you have your broker guide you with your investments, you bring your car to your local mechanic.

Cars receive oil changes every 3,000 miles, and when it is time for your oil change, you bring the car to the service station. When getting the oil changed your mechanic tells you instead of every 3,000 miles, you should get your oil changed every 500 miles.   This just doesn’t make any sense, but you decide to go ahead anyway, because in your mind, the mechanic is the one who does this work for a living, so he must know what he’s talking about.

Stop there. If it doesn’t make sense to you, chances are, you are right on point.  You don’t need to be an expert in the field to know when something is simply off.  First thing you should do: ask to speak to the supervisor.  This should be no different with your stockbroker.

The Financial Industry Regulatory Industry (“FINRA”) recently filed charges against the New York broker-dealer Newport Coast Securities and five of its current and former brokers, charging them of “knowingly engaging in a manipulative and deceptive and fraudulent scheme to churn the accounts of some two dozen customers to boost their commissions.” FINRA alleges rampant churning of customer accounts and other misdeeds that caused significant losses to retirees and other investors.

FINRA is taking action to correct the alleged wrongs of the firm and brokers, and if the firm and brokers are found to have violated both securities law and FINRA rules, there will be be heavy fines issued, as well as the possibility of suspensions and perhaps expulsions from the industry.   This action by FINRA is similar to what the district attorney’s office does with a criminal that steals money from someone.

The present enforcement action by FINRA relating to churning should be a warning to all investors, old and young. Churning is the act of over-trading an account where an exorbitant amount of commissions are generated from the trading.    By way of example, presume an investor has $100,000 in her account. The broker opens the account with a buy of $100,000 of Facebook stock. The broker then repeatedly sells, buys and then sells again the stock twenty times over a one-year period. Each sale is quickly followed by a repurchase.

When one of the sales results in a quick profit, the broker will undoubtedly call and tell you how happy you should be that he made you money on the trade. But did he? Here’s where the churning analysis comes into play. If the broker did not overly trade the position, but rather bought and held, the position would have grown with the market movement of the stock. Instead, the investor’s portfolio has decreased because the broker’s commissions on the buys and sells have actually eaten into the profits in the account, and in many cases simply decrease the portfolio value. The only parties making money on this trading are the broker and his firm.  This type of trading should raise questions – – questions that must be asked before allowing the activity to continue.  And like your mechanic, ask for the broker’s supervisor before things get out of hand with your account.

In addition to enforcement proceedings, FINRA provides investors the ability to bring a civil action against the broker and his employing firm through the arbitration process, a very condensed court-like action. Those who lost money from Newport Coast or any other firm through churning, or other improper acts and omissions, have the opportunity to seek a remedy on their own. Those investors get their proverbial “day in court” in an expedited arbitration process that streamlines both cost and time to have the merits of the claim heard by a panel of arbitrators.

The Law Offices of Barry M. Bordetsky represents parties in arbitrations involving churning, unsuitable trading and other investment related claims. If you have questions relating to investment issues, please contact The Law Offices of Barry M. Bordetsky by calling Barry Bordetsky at (800) 998-7705 or emailing at barry@bordetskylaw.com.

 

 

Is FINRA Hurting Investors?

30 Wednesday Jul 2014

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Negotiating a settlement of any dispute is difficult. Parties often have an emotional attachment to the claim, and when the claim involves the loss of money, emotions run that much higher. This money could have been targeted for retirement, a child’s college education, or simply an account meant to grow in value over time. An arbitration between an investor on the one hand who lost money and the broker on the other hand who was handling the account, is resolved before the Financial Industry Regulatory Authority (“FINRA”).

Because of the very personal nature of the claim, in many cases a mediator is brought in to work with the parties to try to reach a settlement. It is not unheard of during a mediation the parties will not even meet to say hello at the day and place of the mediation.

You have undoubtedly heard the phrase “thinking outside the box”, something which can result in a good settlement in the course of a mediation. One important tool in settlement discussions is to give away something that does not cost anything, but get something of value in return. A good settlement is often one that both sides are unhappy with; and to get to that point the attorneys and the mediator must be able to use all tools necessary to reach a settlement agreeable to all.

In a FINRA setting, when a broker is named in an arbitration, the proceeding is on the broker’s permanent record maintained on FINRA’s central registration depository (“CRD”). This is a record that is generally available to the public. The arbitration can only be removed from the CRD if there is an award of expungement from a FINRA arbitration panel, and that award is subsequently confirmed by a court.

Parties to an arbitration will engage in settlement discussions prior to discovery, during discovery and often times on the day of an arbitration hearing.  For the investor involved in the settlement process, the goal is simple: get back as much of the money that was lost as possible. A tool referred to above for the investor, giving something that is of no value to the broker to get more settlement money, was the expungement tool. Said differently, in exchange for giving the investor money for the settlement, the broker would secure an agreement from the settling investor that he or she would not contest the broker’s expungement request. Keep in mind, this expungement request requires an independent hearing before a panel of FINRA arbitrators.  Simply including language in a settlement agreement was no guarantee the expungement would be granted.

The SEC recently approved FINRA Rule 2081, a rule that summarily removes this critical tool utilized by both sides when settling customer complaints. The rule reads “No member or associated person shall condition or seek to condition settlement of a dispute with a customer on, or to otherwise compensate the customer for, the customer’s agreement to consent to, or not to oppose, the member’s or associated person’s request to expunge such customer dispute information from the CRD system.”

In a word, FINRA Rule 2081 is foolhardy.  To answer the question raised in the title of this article, this rule not only works against the investing public, but hurts  investors trying to settle a claim. The expungement tool was used in the past to put together a good settlement for an investor, trading off the agreement not to oppose an expungement for a higher dollar settlement, or perhaps a settlement payment in a quicker time period.  It was a good trade-off for all the parties involved, and now it has been removed, making it that much more difficult for an investor to procure a better settlement.

If you have questions relating to expungement or investment issues, please contact The Law Offices of Barry M. Bordetsky by calling Barry M. Bordetsky at (800) 998-7705 or emailing at barry@bordetskylaw.com.

The Importance of The Activity Letter

23 Wednesday Jul 2014

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You have a brokerage account. One day you open up your mail (you are responsible for opening the mail) and find a letter from your brokerage firm. The letter thanks you for being a customer of the firm.  The letter then begins the process of reiterating the trading objectives you selected when you opened the account or when the account information was updated. The letter may contain additional information such as the amount of trades in your account over a three-month period of time or the commissions generated from the account (the money the broker and firm is making from the trading in your account). Most likely the letter ends with a request that you countersign the letter to confirm your objectives have not changed, that you authorized and approve of the trading in your account. In some instances the letter will end with a statement indicating the firm will presume all is okay with the trading in the account unless the firm hears anything to the contrary from you. If written correctly, the letter invites you to call with any questions.

Gee, isn’t this nice, you’re thinking. The brokerage firm is checking in on me.

Actually, the brokerage firm is checking in on your broker. The firm is utilizing a very important tool to determine whether the activity in the account is what you have directed and is suitable for you. The letter is aptly called an Activity Letter.

The Activity Letter seeks to determine, for instance, if you are controlling the account or if the broker is controlling the account. To be clear, while there is such a thing as de facto control, if your broker is calling you and recommending a buy or sell, you are demonstrating a manner of control over your account when you agree or disagree with the recommendation. Unless your account is discretionary (meaning your broker trades without the need to speak to you) the broker must discuss, on the day of a trade, the particular recommendation to buy or sell.

The Activity Letter also allows the firm to confirm, independently from the broker, whether it is your intention to trade your account aggressively, conservatively, or somewhere in the middle. The Activity Letter confirms you are not only aware of the trading in the account, but approve of it as it takes place.

The Activity Letter is an important tool not only for the firm, but also you. In most instances the letter is from a compliance officer, branch manager or supervisor at the brokerage firm. If you have any questions relating to your account, take the opportunity to call and ask the questions. The benefit of the Activity Letter from someone other than your broker is you should not feel uncomfortable with the call, but rather emboldened to make sure your investments are being handled as you have instructed.

When you sign and return the Activity Letter to the firm, the firm is relying upon that information in terms of supervising both the account and the broker. Do not sign something that is not accurate. As I have written in the past, you are responsible for reading a document, knowing its content and will be bound by the terms of the document that bears your acknowledgement signature. An informed investor is a smart investor. If you have questions, whether to the broker or supervisor, take the time to ask them. Do not assume. We all know what happens then.

If you have questions relating to this topic or other investment matters, please contact The Law Offices of Barry M. Bordetsky by calling Barry M. Bordetsky at (800) 998-7705 or emailing at barry@bordetskylaw.com.

Accountant = Superman?

20 Sunday Jul 2014

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You know the story.  Little Billy is playing with matches on the hot summer day.   He strikes the match, puts it to the small leaves he’s gathered and watches at first with pure joy as the small fire sparks and snaps as he expected. And then the wind picks up, spreading that small fire across the forest, moving ever so close to threatening the small family farm neighboring the forest. The fire is now beyond little Billy’s control and he can’t undo the damage. And then, just as the fire spreads to the farmhouse, Superman swoops in and puts out the fire. While there is damage from the fire, it is nothing compared to what would have occurred had Superman not arrived “in the nick of time”.

Like little Billy starting a fire, often your broker is playing recklessly with your investments, not looking to the long-term effects of the buying or selling of investments or paying attention to the investment environment. Because of this your investments throughout the year are consistently declining in value putting at risk your retirement goals. Your broker is telling you during this time the strategy he has put in place must be followed, for your benefit. However, like little Billy’s fire, it is moving to a dangerous place.

While accountants are not flying in and saving any farmhouses from fires, they are in place to play the part of Superman when it comes to your investments. In the first quarter of every year your accountant reviews your investment information for tax reporting purposes. Your accountant looks at your investment gains and losses. More importantly, your accountant reviews (or should) the commissions generated from the investment account as well as the number of trades made in the account.   Superman uses his “freeze breath” to stop the fire; your accountant uses his or her calculator.  With that tool, your accountant can tell you that when your broker said “all of these trades are necessary to reach your investment goals” what he really meant was “thanks for all these commissions” as the value of the account actually decreased over the last year.

Your accountant isn’t there to stop the trading before it happens, but with your accountant’s preparation of your tax returns, your accountant may very well play the role of Superman by “swooping in” and working with you to put a stop to the improper trading, ensuring your retirement does not go up in smoke.   While you may not feel comfortable initially confronting your broker about the trading or the commissions in your account, talk to your accountant about what it is you want from your investment account, whether you authorized each of the trades in the account and whether you regularly talk to your broker. Your answers may very well put your accountant in place to “put out the fire” before it threatens your retirement.

When your broker improperly trades your investment account there are means to seek recoupment of the losses. There is a process in place to right such wrongs. However, use the means available to you, such as your accountant, to stop losses, significant losses, before they take place.

If you have questions relating to this topic or other investment matters, please contact The Law Offices of Barry M. Bordetsky by calling Barry M. Bordetsky at (800) 998-7705 or emailing at barry@bordetskylaw.com.