FINRA Group Claims

Pursuant to FINRA Rule 12312(a), a Group Claim is a claim by “one or more parties that assert their right to relief jointly and severally and/or asserting claims that arise out of the same transaction or occurrence, or series of transactions or occurrences.” Specifically, these types of claims are common where there are multiple claimants with similar claims against the same firm or broker.

The phrase “a leopard never changes its spots” usually applies for brokers and brokerage firms who have violated FINRA rules in the past and just can’t help themselves from doing it again. Rather than submit your claim individually your attorney may offer you to be a part of a larger group of similarly situated investors.

This strategy allows you to save on the filing fees, expert fees, and other costs associated with filing your claim as this cost can be evenly distributed to everyone in the group. Another key advantage for being a part of a group claim is that you benefit from the support of others who have also been wronged by the same broker and/or brokerage firm. The last thing a thief wants to see is all of the owners of the properties that he has stolen in the same room lined up against him/her in a judicial setting. Unity against a common foe is a strength in of itself.

Given the clear advantages of being a claimant in a group claim, there are also some disadvantages. Due to the number of Claimants, you may feel that your case starts to lose its uniqueness and that you are unable to truly get the time you deserve to present your case. In these circumstances, it is important that you work with your Attorney to make sure your voice is heard. Every Claimant is allowed the opportunity to testify and tell their own story. Although group claims typically have the same brokers and/or brokerage firms involved, there’s always some distinct facts in your cases that are different from your other co-claimants. Make sure your attorney understands all of the facts of your case before the hearing so that a proper strategy can be prepared.

It is important to note that group claims typically last much longer than an individual claim. Although a Claimant is only required to be present when their “turn” comes up, the hearing usually lasts for several weeks and may not be consecutive (i.e. two weeks in one month followed by another two weeks 3 months later). It is important to communicate with your attorney so that you can plan your calendar accordingly.

Another possible avenue that many group claims head towards is mediation. Mediation facilitates settlement between all parties and saves the time and expense of going into a hearing. FINRA strongly encourages mediation as a settlement tool for a faster resolution. Both parties select a neutral mediator who will review the facts of the case and render their opinion. It is important to note that neither party is bound by the mediator’s opinion. If mediation is a possible option that you would like to explore, please feel free to contact your attorney and explore this option.

If you feel that you’ve been victimized by your stock broker and have any questions regarding group claims, please contact us immediately for a *FREE evaluation. A securities lawyer experienced in FINRA Group Claims will review your financial statements and provide you immediate feedback.