A Word of Advice Mark E. Maddox Maddox Hargett & Caruso, P.C. Securities Law

Investor Losses Family members also can steal from each other Spouses, siblings, caregivers, anyone can be victimized by securities fraud Example of investor loosing nest egg Anyone who manages your money can commit securities fraud or negligence

Securities Fraud, Who is at Risk? Anyone with money Young, old, sophisticated, novice Elderly are increasingly vulnerable Caregivers, adult children Family members stealing from each other Spouses and siblings

Staying Above Board Understand all investments you sell Don’t be pushed to sell the company’s “hot product” Evaluate if the investment is right for your client’s age and sophistication level Make your commissions transparent Disclose, disclose, disclose! Never fib, not even a little Report unethical behavior of your colleagues

Fiduciary Duty, Due Diligence Acting in the best interests of the client Recommend suitable investments Review client’s monthly statements Thoroughly understand risk, volatility of investments Don’t blame losses on “economy” or “market downturn”

Whistleblower Support, Are you Protected? SEC Whistleblower Program, effective July 2010 In 2013, the program paid out more than $14 million You are not required to be an employee to submit information An eligible whistleblower is: A person or persons, not a company or organization Someone who voluntarily provides original information A person who acts on information that is either ongoing or about to occur

FINRA: Self-Regulatory (SRO), Financial Industry Regulatory Authority The largest non-governmental regulator for securities firms Mission is to protect investors and promote market integrity Oversees brokerage firms, their branch offices and registered securities representatives All brokerage firms must become members FINRA touches every aspect of the industry: Educating investors Examining securities firms Administering dispute resolution decisions

The FINRA Arbitration Process Brokerage firms require investors to sign documents, stating all disputes will go through arbitration The occurrence must be less than six years old Process, start to finish, is about two years Average filing fee is $1,300, depending on the claim Documents help substantiate the claim Arbitration awards are final, binding and hard to appeal

Evaluating Investment Losses How do we evaluate a claim? Calculated investment losses Analyzed market conditions Analyze suitability of investments Review of commissions and fees Evaluate pattern of trading and activity Review a Claimant’s investment experience

What Makes a Good Case? Is the firm or stockbroker FINRA registered? What did the broker say about the investments? What transpired with the investments and why? What were the investor’s goals? What was the investor’s previous investment experience?

The Wolf of Wall Street Jordan Belfort- Stratton Oakmont Our firm represented more victims of Stratton Oakmont than any other securities law firm