Securities litigation generally means the judicial or quasi-judicial process in which adversarial claims or lawsuits arising under state and federal securities laws are adjudicated or heard. Securities litigation merely refers to disputes, the subject matter of which concerns securities or the construction or interpretation of state or federal securities laws. The Securities Act of 1933, the Securities Exchange Act of 1934, and almost without exception state securities laws, contain anti-fraud provisions. Securities litigation includes by this definition, individual investor claims group investor claims or lawsuits arising under state and federal securities laws filed in state or in federal court, and include, and more predominately, class action claims.
Securities arbitration claims before the Financial Industry Regulatory Authority or FINRA, the American Arbitration Association or even Judicial Arbitration and Mediation Services, Inc. or JAMS, where, generally, the anti-fraud provisions of the federal securities laws or state blue sky laws are alleged or at issue.
Federal Securities Laws Protect Investors Against Fraud
The Securities Act of 1933
The Securities Act of 1933 generally only relates to the registration or issuance of securities. For example, unless exempt from registration, it is illegal and actually a criminal offense to sell unregistered securities or securities whose registration has not been approved by the US Securities & Exchange Commission. The Securities Act also provides for civil penalties in connection with the execution of a false registration statement, or the use of written materials of any kind, containing false or misleading statements in connection with the initial sale or distribution of securities.
The anti-fraud provisions of the federal securities laws, include Section 12(1) of the Securities Act of 1933, 15 U.S.C. § 77l(a)(1), and Section 12(2) of the Securities Act of 1933, 15 U.S.C. 77l(a)(2), which “prohibits the sale of securities by means of a materially false or misleading writings, and omissions of material fact in connection with the sale of securities” and Section 10 (b) of the Exchange Act of 1934, and Rule 10b-5, as promulgated thereunder, were a a private plaintiff must show that defendants “knowingly or recklessly made a false representation or omission of a material fact in connection with the sale of securities” that was the proximate cause of the investor’s damages.
Similarly, under state law, most states have adopted the Uniform Securities Act, which generally follows Section 10(b) of the Exchange Act, and provides that: “it shall be unlawful for any person, in connection with the offer, sale or purchase of any security in this State, directly or indirectly:
(a) To employ any device, scheme, or artifice to defraud;
(b) To make any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.”
The Securities Exchange Act of 1934
The Securities Exchange Act of 1934, as a general matter only relates to conduct of broker dealers and the regulation of securities after they are sold, the anti-fraud provisions of which generally provide that it is unlawful to make false or misleading statements in connection with the sale of securities, provided of course, as modern jurisprudence would have it, the misstatement or omission was material, or important, assuming significance to the reasonable investor, the misstatement was made with the state of mind embracing the intent to deceive or defraud, or at least reckless, was justifiably relied upon by the investor, and actually was the cause of the damage or losses to the investor.
However, under both the Securities Act of 1933 and the Securities Exchange Act of 1934, the private right of action by investors to bring claims is generally limited to the anti-fraud provisions of both acts. Only the government can bring claims or actions for the violation of other provisions of both acts. As a result, many Courts have found claims relating to the failure to supervise, or the sale of unsuitable investments for which no private right of action technically exists, as cognizable under the anti-fraud provisions of the Exchange Act, under the theory that under Section 10b, the failure to disclose that a broker is unsupervised or an investment is unsuitable is an omission of material fact.
Similarly, the violation of self-regulatory rules or FINRA Conduct Rules generally might not create a private cause of action, but under all instances, the violation of these rules, i.e. the minimum standard under which brokers and brokerage firms may conduct itself, support a private right of action for negligence and a breach of these duties.
State law, even among states adopting the Uniform Model Securities Acts, varies. State law, or blue sky law, related to the issuance of securities is generally modeled after the Securities Act of 1933. Most states, with the exception of perhaps New York, provide for a private right of action for the violation of registration requirements or anti-fraud provisions of the state’s securities acts in connection with the issuance of securities, generally without regard to whether these misstatements were intentional.
Also generally, most states adopting the Uniform Model Securities Act, contain anti-fraud provisions which are analogous to the anti-fraud provisions of the Securities Exchange Act of 1934, and which provide for civil liability for misstatements and omissions or material fact in connection with the sale of securities. However, some states only provide that only the state can pursue these violations and no private right of action exists. At least one state, Pennsylvania only allows these claims against issuers and not stockbroker intermediaries, and yet in other states, states that provide for enhanced remedies such as statutory interest, attorney’s fees, or in some cases treble or triple damages, also provide that the prevailing party is entitled to legal fees, which, when invoked, have been construed to mean if the investor does not win, the investor may be required to pay the brokerage firm’s legal fees.
In any event, litigation is litigation, securities arbitration is litigation. In the case of securities arbitration instead of having your dispute or contest heard by a court, your contest or dispute involving the violation of state or federal securities laws, state consumer protection laws, elder abuse laws, or for negligence, breach of fiduciary duty, or plain old fraud, (based upon the contract you signed when you opened your brokerage account) are decided by a panel of securities arbitrators.
Securities Litigation and Class Action Claims
Securities class action claims are often the only, and the most efficient way for investors to recover damages that arise from a common course of claims against an issuer, or any entity, against whom a common claim or set of claims may be asserted. Securities class action claims are subject to a variety of issues or standards, particular as the result of the Private Securities Litigation Reform Act, and the development of related jurisprudence, concerning the specificity of pleadings, the existence of facts giving rise to a strong inference of scienter, or the state of mind embracing the intent to deceive or defraud, and the stay of discovery pending the adjudication of any motion to dismiss. Various other statutes, and related jurisprudence, including the Securities Litigation Uniform Standards Act of 1998 (SLUSA) and the Class Action Fairness Act of 2005, have curtailed the ability to file class action claims in state court.
In any event, in order to ultimately be certified as a class action, except for settlement purposes where everyone agrees, under Rule 23 of the Federal Rules of Civil Procedure, and generally its equivalent under state law, plaintiffs must show: (a) Numerosity, in that there are so many class members that joinder is impractical; (b) Commonality , in that the claims of the class members involve common factual and legal issues; (c) Typicality, in that the claims of the individual class members are typical to the class; and (d) Adequacy of Representation, that there are no conflicts between the proposed class representative and the putative class and that counsel is experienced and can adequately represent these interests.
Not only can a plaintiff in a class action seek to include all other plaintiffs similarly situated, but also any plaintiff, even a proposed class action representative plaintiff, can file a claim against a set of defendants, or seek to certify a defendant class, were all the defendant participants engaged in a common course of conduct.
Class actions involving investments also need not involve issues related to the federal securities laws or be subject to the PSLRA or SLUSA. Class actions can be and have been successful in recovering money for injured investors against third parties, particularly in Ponzi scheme-like cases involving non-covered securities, under common law theories such as aiding and abetting fraud, aiding and abetting the violation of state securities laws, negligence, and aiding and abetting the breach of fiduciary duty.
In either case, whether a securities related case is being litigated in arbitration before FINRA, or in federal court, in almost any context, the same issues arise as to the “materiality” of any misstatement or omission, i.e. was the information important to investors, “justifiable reliance,” or whether it was reasonable for the investor to rely upon the bad or missing information, and were the investor’s damages directly “caused” by the misstatement or omission.
If you have a securities related claim, you should contact a lawyer. The statutes of limitation with respect to these claims may be as short as one year. Investors that wait or fail to act, while a class action is pending, or which may be ultimately dismissed, are also doing themselves a disservice, and may be bound by a class settlement or unknowingly may be giving up claims against their stockbroker or their brokerage firm as a released party or underwriter of these securities.
Guiliano Law Group
Our practice is limited to the representation of investors. We accept representation on a contingent fee basis, meaning there is no cost to you unless we make a recovery for you. There is never any charge for a consultation or an evaluation of your claim. For more information, contact us at (877) SEC-ATTY.
For more information concerning common claims against stockbrokers and investment professionals, please visit us at securitiesarbitrations.com
To learn more about FINRA Securities Arbitration, and the legal process, please visit us at securitiesarbitrations.com
OUR PRACTICE AREAS
The litigation of individual and group investor claims against securities broker-dealers and investment professionals adjuducated in arbitration before the Financial Industry Regulatory Authority.
Defective Financial Products
Alternative Investments, Promissory Notes, Structured Products, High Yield Bond Funds, Non-Marketable Real Estate Investment Trusts, Inverse and Leveraged ETFs, the Failure to Conduct Due Diligence.
Speculative or High Risk Investment Recommendations, Unsuitable Investment Strategies, Low Priced Securities, Customer Specific Unsuitability, Inappropriate Investment Recommendations.
Breach of Fiduciary Duty, Churing, Unauthorized Trading, Fraud, Stockbroker Theft, Ponzi Schemes, the Sale of Unapprovied investments.
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I had questions and sought a consultation regarding what I believed to have been inappropriate treatment by my brokerage firm. He took the time to give me a clear understanding of what was involved and clearly described next steps to resolve the matter. He did this in a concise, complete and friendly manner. Although in the scheme of things my matter was small. From what I have seen, if I ever had need of a securities lawyer or was asked to refer one to a friend, Nicholas would undoubtedly be the first name I would mention.Keith (Avvo)"Upstanding"
I had a problem with a dishonorable Financial Adviser! So I contacted Mr. Guiliano to see what I could do. Nick said I can't very well charge you for something you can do on your own! Then proceeded to tell me what to do. Because of the short amount of time and my untrustworthy financial adviser's not crossing tee's and dotting I's my life's savings is in the process of being transferred into 3 separate accounts. One's that will work best for me. Instead of one account that kept my money out of my reach! You will have a hard time finding a more upstanding Attorney then Mr. Guiliano!Walter (Avvo)"Successful in Achieving Results"
I was the one who contacted Nick through his website as my ex-wife had little or no knowledge of investments, and depended completely on the advice of the investment firm. Without specifics I can say that Nick (and his wife) were not only successful in achieving results in the case, but in the process were all that one could expect (and more) as shown in my overall ratings above. I would highly recommend him.Joe S. (Avvo)Excellent Attorney!
Nick represented my wife and I in a recent lawsuit. He was the best attorney we have ever used! Communication was great, he kept us updated regularly, he explained everything in great detail, gave us all our options, and most importantly we always felt he represented our best interest throughout the entire process. We would highly recommend Nick!Brian F. (Avvo)"One In A Million"
Nicholas is extremely knowledgeable regarding many facets of the sometimes complicated securities business. This comes from his first hand experience in the business prior to his decision to practice law. Nick is also very dedicated to staying abreast of the ever changing environment that is so prevalent in the investment world. Combine that with his drive and determination to get things done and you have one in a million!!!Anthony S. (Avvo)"Dependable and Accessible"
Philadelphia has lived up to it's reputation as having the best attorneys in the Country. I had been told I had a problem of having a Hedge Fund investment. He went to a lot of time and trouble to not take my case. What I really appreciate is his work ethic. He was very kind to me not only with the generosity of his time, but with his words of support. No civilian, like myself, wants a lawsuit but if I ever needed one, it is Mr, Guiliano who I would call upon to represent me. He is a good man.Kathleen (Avvo)"Absolutely Fantastic"
Nick represented me when a stock broker took advantage of the money I had in my portfolio. He did an unbelievable job because most people thought I did not have a leg to stand on. He really knows his field. I am really thankful that I met Nick because he did a phenomenal job. I would highly recommend him.Theresa S."Successful in Winning"
Nicholas Guiliano was successful in winning a case against one of the firms where I had invested. I had a safe investment until a young eager stock broker took over my account and slowly kept putting my money in risky stocks, all while I was on disability. Nick was able to get me a portion of my money back within 2 months. He always was available to speak, and very courteous. I am so grateful to have found Nick. Thank you Nick!Jill I. (Avvo)"Ability To Think Outside The Box"
Nick Guiliano came highly recommended to me and I was very fortunate that he agreed to take my case. His knowledge of the law and his ability to think outside the box amazed me more and more as my case progressed. His aggressive style and total dedication to me and my case gave me the confidence that we were going to prevail and we did. He is one of the few Attorneys that does not finish his work at end of the day. He was always thinking of ways to use his expertise and knowledge on my behalf. On a personal note, he is a very down to earth guy who makes you very comfortable and at ease. He gave me the ability to sleep at night knowing that my case was in his hands. I will always recommend him without any reservations. In my book he is “the Best”Jerry V. (Avvo)"His Ability And Advice Paid Off"
We called Mr. Guiliano after reading his article in Forbes magazine. Although we though the statue of limitations might have run out on our case, we were thrilled when he took our case. Against the odds, he was able to get a settlement for us. He kept us informed and advised us on the proper course of action. We always felt confident with his ability and advice and it paid off. Highly recommend.Cris (Avvo)"Recommend Him Strongly"
I used Mr. Guiliano for a investment fraud case and he did a very good job. I got a good deal of my money back that had been lost due to risky investments I was put into by a prominent company. It was not a really big case, yet Mr. Guiliano was interested and responsive and kept on top of things for me. I would recommend him strongly.Anne H. (Avvo)"Superb Representation"
Mr. Guiliano (Nicholas) represented my mother and I in an investment case where it appeared the agent was preying on elderly people and steering them to improper investments to reap commissions. Mr Guilano did an excellent job of preparing the case and representing us. Although the case settled out of court, it was the best outcome expected for several technical reasons out of his control. He always kept us informed and provided sound recommendations. I would not hesitate to recommend Mr. Guiliano for any investment related case.Bob W. (Avvo)"Somebody you want on your side"
Personable and professional, he is the one to go to when investors are defrauded by Brokerage houses and Investment banks. Somebody you want on your side when things go wrong. He takes personal interest in every case and tries his best. Although I could not recover all my losses due to Fed/SEC action which was beyond his control, I would give Mr. Guiliano full marks on every count. He even worked with my accountants to help me write off losses due to fraud.Ashok N. (Avvo)"More than most lawyers"
Mr. Guiliano is highly accomplished securities lawyer. He helped us secure a wonderful result in case where my husband and I lost almost all our lifesavings. He is also high compassionate, and did more than most lawyers have ever done for us, as he seems that he cares.Mary S. (Avvo)"Awesome Results"
I would like to take this opportunity to express my sincere congratulations for your awesome results. I want to acknowledge my appreciation and respect for their splendid professionalism and knowledge you have shown in handling the laws (previous and present), for arbitration over fraud litigations.Ben S. (Google Business)"Best Of The Best"
I have employed Nick Guiliano personally and on behalf of my clients in the past. Nick is absolutely the best securities lawyer in Philly if not the country. The best of the Best!Ken S. (Google Business)"Finest Litigation Attorneys"
I have been a Corporate Counsel for over 30 years having worked with Banks and large public companies. Nick is one of the finest litigation attorneys in the country.Anthony P. (Google Business)"Fights for his clients like a bull dog"
I contacted Nicholas Guiliano for my 90 year old mother, who lives in Oregon to assist her in recovering from an unscrupulous financial manager who talked her into investing in some very high risk and speculative securities to reap high commissions. Mr Guiliano worked very hard to recover what he could for my mother. He is the best and fights for his clients like a bull dog to uphold their rights and protect their interests. I highly recommend Mr Guiliano and his firm when it comes to securities issues.Robert (Google Business)"Man Of Integrity"
Nick is an incredibly decent Atty. He's a man of integrity, fairness, and honesty. You could see that it's wasn't just me who noticed, it was opposing counsel, at the end of the Zoom! I'm completely impressed with Nick and will keep him in my prayers. Thanks again!Paula (Martindale-Hubbell)"Very Good To Work With"
My case was taken on a contingency basis. Even though it lasted about two years, the Guiliano law firm kept in contact with me, continued to research the case and brought it to a successful conclusion. They were very supportive of me in my first such experience and were very good to work with.Nancy T. (Martindale-Hubbell)"We are so very grateful"
My husband and I were lucky to find Nick after losing a substantial amount of money due to poor investing from a prominent company. He made us feel at ease right away and was always accessible for questions and concerns. Nick and his team were wonderful with gathering up all the pertinent information needed for our case, constantly in contact with us, answering all of our questions, which helped to make the process a lot less stressful. We are so very grateful to have had The Guiliano Law Firm represent us and the fact that they did it on a contingency basis made it possible to follow through. If not for them, we would never have been able to pursue this, financially or emotionally.Stacey B. (Avvo)"Incredibly Resourceful"
Nick was incredibly resourceful and professional. His understanding of securities and investment fraud is unparalleled. He is indeed connected with all the powers to be , and is able to provide intellectual and cogent insights. He is tenacious in fighting for his clients, and will never relent. I was able to follow his recommendations and am glad I did.Mark C. (Avvo)
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