THE HAYES LAW FIRM, www.dhayeslaw.com
The following is a transcript from an interview with Debra Hayes a securities arbitration lawyer who has been practicing for over 20 years as a litigator. Her firm is very unique in that all they do are securities arbitration cases, which means that they go before the NASD and the NYSE and handle cases before a private panel of arbitrators.
Interviewer: Could you tell us what NASD and NYSE stand for?
Debra Hayes: Yes. The NASD is the National Association of Securities Dealers. Any brokerage firm or any broker must be a member of the NASD in order to sell securities that are tracked on the NASD. There's also the NYSE, the New York Stock Exchange. Again, if you are going to be a broker or a brokerage firm, you must be a member of the NYSE in order to sell securities that are carried on the NYSE.
Interviewer: How would a consumer end up in your office? Why would they need securities arbitration?
Debra Hayes: First of all, the consumer will be someone who has lost money investing in the stock market.
The reason a consumer would need securities arbitration is that whenever you decide to invest in any manner and you go to a typical firm, such as Merrill Lynch or Salomon Smith Barney or Citigroup or Edward Jones or Raymond James, these would be the biggest names, you're going to sign an account agreement with this company in order for them to be your broker and help you with your investments. So, when you sign that agreement, there will always be an arbitration clause in it.
Your right to go to your state court or your federal court and present your case to a jury is waived when you sign this arbitration agreement. So your only way to have a grievance against the firm or against the broker is to file a claim with the NASD or the NYSE who then sets up the arbitration of the matter.
If you went out to invest and you have lost a fair amount of money in that investment process, then you should seek an attorney and see if you have the right to obtain a recovery for the monies that you've lost.
Interviewer: When would you know that you have a claim versus just a typical loss that may happen with any investment?
Debra Hayes: First you want to look at how much money you lost and what type of market did you lose it in. For instance, in 2001, when the market crashed, if you lost more than 20% of the principal amount of your investment, you had a good claim. So, if you took $100,000 in to an investment firm and all of a sudden you're sitting here with only $80,000 left, you haven't made any money on you investment, in fact, you lost money and should seek out an attorney.
In today's market, a strong upward market, if you have suffered any loss of money, you probably have a case against the broker and you should seek advise on the matter from an attorney.
There are also products that are purchased that raise a red flag for consumers. For instance, one of the hottest products of late has been something called a variable annuity. You may be in a variable annuity and not even understand that you're in it. Variable annuities are virtually unacceptable and what we call "unsuitable" products for the majority of people; there are very few people they are suitable for. So, if you're in a variable annuity, then you should be contacting an attorney as to whether or not that's a good product for you to be in.
Other things that have happended of late that are very popular are what we call a 72(t) plan. The average consumer isn't going to understand what that means. Say for instance you've got a 401(k), you're retiring and decide to roll over your 401(k) or you've got a lump sum retirement because your company was encouraging early retirment. These accounts were then taken by the brokerage firms and a hypothetical illustration was run showing you that you could take "x" number of dollars out per month and your money was going to last you as long as your life expectancy.
Unfortunately, those hypothectical illustrations have not proven to be true. You're probably not going to discover for seven to ten years down the road when all of a sudden you don't have any money left. So, I would encourage anyone that has any questions about what's going on in their accounts, and they may not even understand how much they've lost, to contact us so we can look at your documents. It's a simple process and we don't charge for it. We can either affirm that we think you don't have a claim or, if we do see some problems with your investments, then we can take the case further at that point.
If you believe your broker has defrauded you, please contact THE HAYES LAW FIRM at 1-866-332-3567 and visit our web site at www.dhayeslaw.com
Send an email to Debra Hayes at dhayes@dhayeslaw.com
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