About the Firms Stockbroker Fraud Practice

The Robert Hutchinson Law Firm’s practice includes business and securities litigation, such as investor disputes against brokers and companies and shareholder disputes.

The Robert Hutchinson Law Firm helps investors who have been defrauded or otherwise improperly treated by a securities stock broker or brokerage firm, or a mutual find or publicly held company, whether through a false prospectus or registration statement, inappropriate or unsuitable recommendations, excessive or unauthorized trading, churning, false or misleading representations, or corporate fraud or mismanagement.

Cases

George's Case   Linda's Case   Joe and Martha's Case   FAQ's

George's Case

George (not his real name) was a retired schoolteacher in his 70’s. His long time friend and financial advisor, who was affiliated with a large investment company, steered him into investments that proved to be worthless. In fact, these investments were other companies owned by the advisor, and there were shaky to begin with. Of course, George was never told that; and George who was smart when it came to a lot of things, was a man who had no investment training or expertise – that’s why he had a financial advisor.

This went on for years and years, until George had invested about a half a million dollars, which was his entire retirement savings. The investment advisor actually had George mortgage his house and put the equity into his companies. In other words, he bled him dry.

More years go by, and advisor constantly assures George that everything is all right. His daughter got suspicious and asked questions, but got few answers. In fact, he was very sketchy about what loans were made, and for what amounts. She kept asking for a meeting, which, after weeks of stalling, they had. They were finally told there was no money to repay the loans.

They then got a lawyer who contacted the FBI, the Securities and Exchange Commission, and finally the National Association of Securities Dealers, Inc. (“NASD”). After about a year of this, they had gotten absolutely nowhere.

It was at this point that I met with George and his family. I explained their options and made recommendations. We filed a claim for arbitration with the NASD – they couldn’t go to Court because their broker’s agreement required arbitration (which almost all do).

To make a long story short, we were was able to recover substantially all of George’s money.

Linda's Case

Linda (not her real name) was a retired woman in her 70’s when she came to see me. Her husband had died a few years earlier, and left her with a nice amount of money. Buy she had never handled investments, so she got a recommendation of an investment advisor from a friend. He was with a large investment firm, and handled her investments for a number of years, and then borrowed money from her – or, as he would later try to explain it – it was not he who was borrowing the money, but his companies! Over the years, he managed to borrow everything she had, even to the point of having her mortgage her house and another house next door that she owned.

Meanwhile, he assured her that everything was fine. Everything was not fine. After some time, Linda was concerned, but desperately wanted to believe him. In her mind, the alternative was to see her future not as secure and carefree, but to look in the face of financial ruin, and all the horrors that come with it. Finally, she couldn’t pay her bills, and began to press the advisor him for her money. His answer? Talk to your kids, they can help you out!

How could she live? How could she work? She decided to go to college and get a degree (she had one college degree). This of course, was an act of desperation. What could she do?

After she came to see me, we filed a claim with the National Association of Security Dealers, Inc. (“NASD”), because her broker agreement said she couldn’t go to Court, but had to arbitrate.

By the time it was all said and done, we recovered about a half a million dollars, which was just about all she lost, so she was able to reclaim her life- and to quit college once and for all.

Joe and Martha’s Case

Joe and Linda (not their actual name) had no financial training, and although they ran their own small business, they really had did not know how to make or manage investments. Like many people, they got a financial advisor to help them.

After a period of time, this advisor put them into highly speculative deals that were not even sanctioned by the company with which he was affiliated, despite the fact that they stated on their account form that they wanted only low risk investments.

I was contacted by another lawyer and agreed to handle the case. What is interesting is that the advisor claimed that he merely introduced Joe and Martha to the principal of the firm in which they invested; that he was just an innocent bystander, just like the three monkeys: Hear No Evil; See No Evil; Speak No Evil. No doubt he thought that this would be a “he said, she said case” kind of a case that he would easily win.

We filed the case for arbitration because their broker’s agreement had the usual language that said they couldn’t go to Court, but rather limited their rights to filing for arbitration.

By the time it was over, after several days of arbitration, we completely destroyed his “three monkeys” defense, proving that not only had he been directly and repeatedly involved, but that he had done the same thing to many of his other clients. The arbitrators levied the maximum award against him and assessed a large award against his company.

COLORADO STOCKBROKER FRAUD DISCUSSION AND FAQ

What is a security?

It can be almost any kind of investment or deal. One major area of fraud has recently been that of promissory notes or “loans,” where the broker has the client making loans to questionable companies or even companies the broker owns or controls.
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Does it help to write a letter to the broker or the company to try to get my money back?

No! Typically, firms have to be forced to pay. They have shown very little willingness to step up to the plate and take responsibility. Just as the recent scandals on Wall Street involving Merrill Lynch and the others have demonstrated, the firms had to be sued, which New York Attorney General and others did. The examples are endless. Their hope is that you go away or miss one of the time deadlines. While they are very interested in you when you are making them money, the minute you become a “liability” or a “risk” their attitude changes, and their interest goes away - avoidance and denial become the name of the game.
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How does the process work?

When you open an account, most brokers have you sign a form that requires arbitration; in other words, you give up your right to go to court. This arbitration is usually before the National Association of Securities Dealers, Inc. (“NASD”). A case is started by filed by your attorney with the NASD in New York City, which will then refer it to the Chicago office of the NASD for administration, and finally, it will be heard before a panel of usually 3 arbiters in Denver (assuming it is a Colorado case).
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How long does it take?

You can assume it will be about a year from filing before it is heard.
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Do I have to go through all of this? Can’t I just write a letter to the NASD?

The NASD might look into things and might investigate your complaint, but at the end of the day, it will not take action to actually get your money back for you. They are just not set up to do that. Remember, the NASD is a self-regulated organization or “SRO” that is made up of the very broker-dealers that it investigates, so it is not going to go that last mile to recover your money.
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What about time limits?

You should act as soon as possible. The federal securities laws have a one-year statute of limitation, but the Colorado state laws provide for a longer time period, and the statutes of limitations can be suspended altogether under state law where there is a cover-up by the broker, which is often the case. Evidence, like bread, never gets fresher with time, but only gets stale, and eventually unusable. The object then is to act while the trail is fresh.
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But I just found out about this recently even though the fraud happened years ago, is it too late?

Maybe not. It is of course more difficult this way, but in some cases it can be done.
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