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Securities Arbitration for IL Fraud, Negligence Case

Thursday, September, 13, 2012


Two Illinois retirees have filed a $300,000 securities arbitration claim against UBS Financial Services. The parties involved are claiming that they lost the money through fraud and other bad behavior on the part of UBS. Their lawyers filed the arbitration claim with the Financial Industry Regulation Agency (FINRA) on their behalf.

Why are They Seeking Securities Arbitration?

The claim is multi-pronged. The two Illinois residents are claiming that UBS Financial Services too-heavily invested their money in Barclays iShares. They also are accusing the firm of negligence, negligent supervision, breach of fiduciary duty, and flat-out common law fraud!

How the "Know Your Customer" Rule Applies in Financial Arbitration

In the financial services industry, something known as the "Know Your Customer Rule". This rule is supposed to keep investment and securities firms--and their brokers--consistently mindful about the needs of each client.

Brokers are expected to consider each client's age, net worth, objectives, and investing experience when they make choices on that client's behalf.

The "Know Your Customer Rule" is not actually a written rule or law; rather, it is an informal name for what responsible brokers consider their duty.

Where Did UBS Fail?

There has been no decision yet on how UBS failed its clients--or for that matter, if they even failed them at all.

It is typical for disputes and accusations to go through financial arbitration through FINRA, rather than going to court. Many investment firm and brokerage contracts bind their clients to the FINRA Dispute Resolution for arbitration. Unless they thoroughly read their contract, clients may not be aware of this.

The arbitration proceedings will be conducted by FINRA, with the plaintiffs represented by the White Law Group. The group handles securities arbitration, securities fraud, and other investor/client-side issues. The White Law Group has offices in Chicago, IL and Boca Raton, FL.

Searching for the right arbitrator to represent you or someone you know for a security arbitration case? Arbitration.com provides a directory of reliable security arbitration attorneys in your local area.