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Learn About the Laws and Regulations that Protect You from an Experienced Stockbroker Fraud Attorney

As an individual investor, one of the greatest risks you face is the risk of falling victim to stockbroker fraud. Various forms of fraud can leave investors facing substantial losses, and, in these cases, defrauded investors must hire an experienced stockbroker fraud attorney to help them assert their legal rights as quickly as possible.

The good news is that there are several laws and regulations that protect investors. In FINRA arbitration, defrauded investors can pursue claims based on both federal law and FINRA’s Rules. With this in mind, some of the main laws and regulations that protect investors include:

Section 10b of the Securities Exchange Act of 1934

The Securities Exchange Act of 1934 is one of the primary federal laws that protects investors in the United States. While it establishes requirements for companies that offer securities to the public, it also establishes prohibitions on stockbroker fraud. These prohibitions appear in Section 10b, which states:

“It shall be unlawful for any person . . . [t]o use or employ, in connection with the purchase or sale of any security . . . any manipulative or deceptive device or contrivance in contravention of such rules and regulations as the [U.S. Securities and Exchange Commission (SEC)] may prescribe as necessary or appropriate in the public interest or for the protection of investors.”

In prohibiting any “manipulative or deceptive device or contrivance” that violates SEC rules, Section 10b is broad by design. It exists specifically to protect investors, and it gives the SEC authority to outlaw all forms of stockbroker fraud.

SEC Rule 10b-5

The SEC adopted Rule 10b-5 in direct response to Section 10b of the Securities Exchange Act of 1934. Similar to Section 10b, Rule 10b-5 is extremely broad, and it gives investors the right to pursue claims for relief for virtually all forms of stockbroker fraud. Under Rule 10b-5, investors can pursue claims against stockbrokers who:

  • “Employ any device, scheme, or artifice to defraud;”
  • “Make any untrue statement of material fact or omit to state a material fact necessary in order to make the statements made . . . not misleading;” or,
  • “Engage in any [other] act, practice, or course of business which operates or would operate as a fraud or deceit upon any person.”

FINRA Rule 2020

FINRA Rule 2020 also protects investors who fall victim to stockbroker fraud. It prohibits stockbrokers from inducing or executing any securities transaction “by means of any manipulative, deceptive or other fraudulent device or contrivance.” Just like Section 10b and SEC Rule 10b-5, FINRA Rule 2020 is intentionally written this way in order to allow defrauded investors to pursue claims in as many circumstances as possible.

Discuss Your Legal Rights with an Experienced Stockbroker Fraud Attorney for Free

Do you need to know more about the laws and regulations that protect you as an investor? If so, we invite you to get in touch. To speak with an experienced stockbroker fraud attorney in confidence, please call 212-742-1414 or request a free consultation online today.

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“Jake Zamasky and his colleagues represented me in a FINRA arbitration case against a large multinational bank and succeeded in obtaining an award for the full amount of my investment losses. I would highly recommend the Zamansky firm for their experience in securities litigation, their level of detailed research and case preparation, and their ability to effectively fight for what’s right.”

Richard R.

“Throughout my entire case, Jake Zamansky was incredibly responsive and spent time walking me through each step of the process. He is professional and worked with my challenging schedule, even meeting with me nights and on weekends. He knew exactly which turn to take when it came to my case and yet was respectful of any decisions I wanted to make resulting in a positive outcome.”

Donald A.

“Jake Zamansky and his firm represented me in a FINRA arbitration case to recover investment losses. Jake and his team were very professional and worked very hard preparing for trial and then reaching a substantial settlement of our case. I would highly recommend them.”

William E.

“Jake Zamansky represented me in a FINRA arbitration case which allowed me to recover a substantial portion of investment losses. He is truly an expert in this space and I would highly recommend him to those investors who may have been been a victim of investment fraud.”

Chris K.

“Jake and his team did a great job communicating with me throughout the process of my lawsuit. I would recommend him to anyone looking to sue UBS for unethical practices.”

Mike A.
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