The rules and regulations regarding the transactions involving securities are extensive and complex. In part, the rules require brokers and financial advisors who buy and sell securities for investors to act in the best interest of their clients, and they must exercise good faith in completing any transactions. Unfortunately, brokers and financial advisors do not always comply with the duties that they are required to uphold. Sometimes they engage in negligent or fraudulent behavior in conducting transactions. Broker and advisor misconduct often results in financial devastation. If you have lost money due to the improper acts of a financial services professional, New York securities lawyer Irwin Weltz at Weltz Law, P.C. can assist you with holding all of the responsible parties liable for your losses. Attorney Weltz has decades of experience representing investors in FINRA arbitration and in cases in state and federal courts. He is familiar with the specific laws and procedures that govern securities litigation in New York.
The Martin Act
New York General Business Law Article 23-A, commonly known as the Martin Act (the Act), prohibits misrepresentations or fraud in the sale and purchase of securities. This law is enforced by the Office of the Attorney General’s Investor Protection Bureau. The Act has been liberally interpreted to bar any deceitful practices, including attempted fraud. The Act grants the New York Attorney General the authority to investigate securities fraud and to bring civil or criminal actions against alleged violators of the Act. To prove a violation under the Act, the State is required to show an omission or misrepresentation of a material fact or any conduct that deceived the public. Except for cases involving felonies, the State is not required to prove an intent to defraud.
Claims for Damages Under New York Law
The Act does not expressly allow for a private right of action, and the New York courts have ruled that the Act does not grant an implied private right of action either. However, the Act does not preclude people who were harmed by a financial services professional’s negligent or intentional acts from pursuing a civil claim under the common law. A knowledgeable securities attorney in New York can help them assert their rights. Private parties can pursue claims alleging fraud, misrepresentation, or negligence, as long as the claim is not solely based on a violation of the Act. The claim can arise from the same conduct that would support an action by the State arising out of the Act.
The standards for proving common law fraud claims differ from those for proving violations under the Act. For example, unlike a claim alleging fraud under the Act, a fraud claim under New York law requires the plaintiff to show that the party that allegedly caused their harm misrepresented a material fact with the express intent of defrauding the injured party. The injured party must also show that they reasonably relied on the misrepresentation, and they suffered harm as a result of their reliance. Common law claims may be pursued in state or federal court, but they are often resolved in binding arbitration. An experienced New York securities attorney can guide an investor through these complex proceedings.
What Do You Do Now?
If you suffered losses because of investments made through a New York broker or financial advisor, it is critical to consult a skilled lawyer as soon as possible to discuss whether you may be able to recover the money that you lost. Weltz Law has helped parties harmed by the negligent and fraudulent acts of brokers and financial advisors for over 25 years. We regularly represent parties in FINRA arbitration and in state and federal lawsuits.
Victims of securities fraud may suffer financial ruin and feel as though all hope is lost with regard to restoring their financial health. This is often not the case, however, and investors have important rights to assert. At Weltz Law, P.C., we can guide you through the process of seeking compensation for your harm.