Barr & Douds is a premier law firm in Danville, CA, offering exceptional services in securities arbitration and litigation. Known for an aptitude in navigating the complexities of securities law, Barr & Douds is a trusted resource for individuals and institutions seeking skilled legal counsel in Danville and beyond.
California Securities Arbitration and Litigation Attorneys
Securities Litigation & Arbitration Lawyer in Danville, CA
A recent retiree sees her improperly diversified retirement nest egg lose half its value in a few weeks. An elderly couple loses their life savings in an investment recommended by their accountant, who pocketed a secret commission. An investor incurs massive losses because his portfolio is tied to the oil markets. A financial advisor is wrongfully accused of fraud for recommending a diversified portfolio of bonds that declined in the financial crisis. A successful executive prematurely exercises all of his company stock options, costing him millions in lost profits, on the misleading advice of an investment advisor only interested in earning fees. A brokerage firm is accused of violating regulations even though there was no evidence its customers were harmed. These are a few examples of the securities arbitration and litigation cases our California sec litigation lawyers investigate, litigate, and resolve through settlement, arbitration, or trial for our clients.
Barr & Douds Attorneys is a highly regarded law firm specializing in securities litigation and arbitration, located in Danville, CA. With a team of experienced lawyers dedicated to protecting the rights of investors and resolving complex securities disputes, we offer superior legal representation and personalized service.
The firm’s attorneys possess a deep understanding of the intricate regulatory framework governing the financial industry, enabling us to navigate the complexities of securities law with precision. Whether advocating for individuals or institutional clients, Barr & Douds Attorneys is known for a commitment to achieving favorable outcomes and tireless pursuit of justice in securities-related matters.
What Is Securities Litigation?
“Securities Litigation” is a catch-all phrase that includes:
- Investor arbitrations and lawsuits filed against stockbrokers, registered investment advisors, and financial advisors;
- Enforcement investigations and lawsuits filed by the Securities and Exchange Commission, state regulator, or FINRA;
- Criminal prosecutions for insider trading;
- Shareholder class actions brought against public companies and investment funds for the alleged failure to disclose material information in mandatory SEC filings.
At Barr & Douds, our securities arbitration and litigation attorneys focus on the first two areas of securities litigation: investor arbitrations and lawsuits, and enforcement actions. Whether you’re an aggrieved investor, registered investment advisor, licensed FINRA investment professional, or a broker-dealer, your litigation in the heavily regulated securities industry requires experience, careful planning, and dynamic trial skills from a stockbroker arbitration attorney. Private litigants, the Securities Exchange Commission, FINRA regulators, California’s Office of Business Oversight, and the Department of Insurance are foes our FINRA arbitration law firm has battled before. Most cases resolve, but when they don’t, our FINRA arbitration lawyers are ready to vigorously represent you through trial or arbitration to protect your savings, retirement portfolio, license, or business.
Our opponents change from case to case, but the underlying legal claims do not. We litigate claims that involve:
- Over-concentration and portfolio mismanagement;
- Breach of Fiduciary Duty;
- Fraud;
- Unsuitability;
- Churning;
- Mismanagement of Mutual Funds and ETFs;
- Mismanagement of Managed Accounts;
- Employee Promissory Notes and EFL Loans;
- Raiding, Trade Secret, Unfair Competition Claims.
In addition, our securities litigation lawyers have helped financial professionals expunge false and misleading marks from their publicly available professional profiles. If you’re an investor who has been wronged, an investment professional being accused of wrongdoing, or a broker-dealer seeking to defend investor litigation, please contact us to find out how we can help.
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What Is Securities Arbitration?
The vast majority of investor-filed financial litigation occurs in arbitration forums – most commonly before the Financial Industry Regulatory Authority, known as FINRA. FINRA runs a Dispute Resolution service that provides rules for arbitrations between its members and the members’ customers. FINRA conducts arbitrations in San Diego, Los Angeles, San Francisco, and other major cities around the United States. Most securities brokerage firms’ customer agreements require any dispute between the firm and its employees on the one hand, and the customer on the other, be submitted to arbitration before FINRA. Some registered investment advisors and private investment funds known as hedge funds require their investors to agree to submit any dispute to the American Arbitration Association (AAA) under its commercial arbitration rules. Unlike FINRA, AAA arbitrations can be conducted in places outside of large cities like San Francisco or Oakland, in places like Palm Springs, Sacramento, Fresno, San Jose, Walnut Creek, or Danville (where we are located). These arbitration clauses were found to be enforceable by the U.S. Supreme Court approximately 30 years ago, and, since then, most investor claims against their brokers and advisors have been sent to arbitration.
There are pros and cons to arbitration for investors, advisors, and securities brokerage firms that find themselves litigating disputes under FINRA’s or AAA’s rules. Arbitration cases are often heard and decided faster than lawsuits filed in State or Federal Court. Arbitration decisions are rarely overturned on appeal, which gives them a sense of finality, but can mean that errors in the decision-making process are not corrected. Arbitration rules of discovery are restricted, which may prevent lawyers litigating these claims from fully investigating them due to restrictions on depositions. The rules of evidence are relaxed, which often means hearsay is presented to arbitrators during hearings. Finally, arbitrations are usually decided by a panel of three experienced business, legal, or accounting professionals instead of by a judge and jury. As a result, arbitrator selection is a crucial part of any case. For example, by knowing the arbitrators who are often assigned by FINRA to hear San Francisco arbitrations, we are better able to select the right arbitrators to hear our clients’ cases. All participants in arbitration claims should be represented by experienced securities litigation attorneys who are familiar with FINRA and AAA rules and arbitrators. Many investors, and even some investment professionals, mistakenly believe they can handle securities arbitrations on their own due to the less formal nature of the proceedings. This is an error because the other side will probably be represented by an experienced lawyer.
Most securities litigation cases focus on three interrelated claims: Fraud, Suitability, and Breach of Fiduciary Duty.
- Fraud generally falls into two categories: False statements about the nature of an investment or portfolio of investments, or material omissions of important information that, had an investor been told, would have caused them to never invest or sell. Â
- Suitability claims are based on a violation of securities industry rules that require investment professionals to only recommend investments and portfolios that are suitable in light of the investor’s age, income, net worth, and investment objectives. Suitability responsibilities extend beyond the date of investment. A financial professional should review each investor’s portfolio and suggest rebalancing or other changes to ensure it remains suitable in light of the suitability factors.
- Breach of fiduciary duty claims are based on an investment advisor’s duty to place the interests of the customer/investor ahead of their own. When advisors place their own financial interests ahead of their clients, such as when they sell a high-commission fund or annuity solely for their own benefit, advisors can be held liable for breaching their fiduciary duty to their clients.
All of these claims focus primarily on the written and verbal communications between advisors and their investor-customers. These communications become the focus of pre-arbitration or pre-trial discovery, and evidence of the communications is often the focus at trial. As a result, it’s important that all litigants retain experienced counsel who are adept at requesting, and locating, those communications.
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What Are Regulatory Investigations and Litigation?
Securities professionals work within a highly structured set of rules, regulations, and laws. FINRA, the SEC, and state regulators all play a part in the licensing and oversight of the securities industry. These regulatory entities investigate and litigate against companies and licensed individuals they supervise. For example, FINRA Rule 8210 allows FINRA enforcement investigators and lawyers to gather documents, take testimony under oath, and request information from member firms and their employees. These requests often come with short deadlines for responses. It is crucial that the responses are truthful, because lying to regulators is a common basis for criminal prosecutions, as we’ve previously written. Regulatory investigations are often handled geographically, though there are exceptions. For example, we are located in Danville, California, near Walnut Creek, so most of the regulatory investigations in which we have represented clients have arisen from regulatory offices in San Francisco. We have also assisted with investigations emanating from New York and Los Angeles.
Regulatory investigations sometimes result in regulatory litigation. Before the litigation is filed, regulators often inquire whether there is an opportunity for settlement. If the case does not settle, the regulators typically send out a “Wells Notice,” which is often a letter, outlining the claim the regulators intend to bring against the advisor, broker-dealer, or affiliate. Even after the Wells Notice is sent, most cases settle before they go to trial before a FINRA tribunal or SEC Administrative Law Judge.
Regulatory Litigation differs from civil litigation because the regulatory enforcement lawyers have conducted their investigation, including gathering their testimony, before they file. This places a burden on the defendants to undertake their own investigation using discovery tools to attack the regulator’s evidence.
Our team has experience in regulatory investigations and litigation in the San Francisco Bay Area.
Unfair Competition, Trade Secrets & Employee Raiding Litigation
Employees generally owe their employers a duty of loyalty. The scope of that duty increases as the employee rises in the organization. Employees breach their duty of loyalty when a high-ranking employee assists a competitor while remaining on the payroll of their current employer. Employees also have a responsibility to maintain the confidentiality of their employer’s trade secrets. California has adopted the Uniform Trade Secrets Act (UTSA), which provides specific remedies for employers who have had their trade secrets taken by former employees. Under some circumstances, an employer’s customer and client lists can constitute trade secrets. Key employee compensation packages can also constitute the confidential trade secrets of an employer. Congress recently passed the Defense of Trade Secrets Act which mirrors many of the provisions in the UTSA and grants federal court jurisdiction over claims filed based on the DTSA.
California Business and Professions Code section 16600
California Business and Professions Code section 16600 voids any contract that prevents an employee from practicing their trade, business, or profession. There are a few exceptions, such as when a business owner sells their company, but generally B&P Code section 16600 precludes the enforcement of noncompetition provisions against California employees that might be enforceable in other states. Some courts have held that forcing California employees to sign non-competition agreements that violate section 16600 is an unfair business practice.
Employee raiding refers to efforts by one competitor to target individuals or groups of employees who work for a specific competitor. Employee raiding can be considered an anticompetitive business practice because it is designed to injure a competing business by crippling its ability to compete in the marketplace. Often, raiding claims and claims of UTSA violations are filed at the same time.
We have experience litigating employee raiding, unfair competition, and trade secret cases in the securities, insurance, business valuation, banking, and consulting fields. Trade secrets and employee raiding claims occur with some regularity in the securities industry because of the nature of client-advisor relationships and the mobility of brokers among firms. Raiding cases in the securities industry are often subject to the broker protocol, which is an agreement among various securities firms about the acceptable manner in which investment professionals can move between firms and notify their customers. Recently, some of the largest brokerage firms and founding signatories of the broker protocol have withdrawn their names, concluding that the protocol is not in their shareholders’ best interest.
The first stage in trade secret and raiding litigation is often a hearing on a Temporary Restraining Order (TRO) or Preliminary Injunction. These remedies are specifically authorized in UTSA claims. In the securities industry, once the injunction request has been ruled on by a court, the cases often proceed to arbitration before FINRA. For cases outside the securities industry, the cases usually continue in state or federal court.
We have more than two decades of experience litigating and advising employers and employees on both sides of these cases. We have counseled departing employees and their new employees about the best ways to mitigate litigation risks. We have also advised employers about the business considerations involved in this unique area of litigation.
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Do I Need an Attorney to Represent Me in Arbitration?
It is not required, but we strongly advise it. The investment firm, stockbroker, and advisor against whom you file will probably be represented by an experienced attorney well-versed in the arbitration rules and legal arguments. Those attorneys’ sole job is to defend their clients, not to represent you. Even when they are in-house lawyers employed by the investment firm itself, their duty remains the same. You will be at a significant disadvantage if you are not represented by competent counsel.
A securities arbitration attorney can provide crucial assistance throughout the arbitration process. They possess in-depth knowledge of securities laws, regulations, and industry practices. With their background, they can evaluate the merits of your case, strategize the best approach, and guide you through complex legal procedures. They will gather relevant evidence, prepare persuasive arguments, and effectively present your case before the arbitration panel. Additionally, they can negotiate settlements on your behalf, ensuring your interests are protected. Overall, a securities arbitration attorney’s guidance and advocacy increase the likelihood of achieving a favorable outcome in your arbitration dispute.
Why Choose Barr & Douds Attorneys to Represent You in a Securities Dispute?
When it comes to your securities litigation & arbitration case, Barr & Douds Attorneys stands out as an exceptional choice. Here’s why:
- Specialization: Many lawyers who handle securities arbitrations limit their representation to individual investors, or to defending investment advisors and investment firms. We represent both. We believe our breadth of experience gives us a unique perspective that allows us to effectively advocate for our client’s cases zealously and persuasively.
- Expertise: We have nearly three decades of experience representing investors, advisors, stockbrokers, and investment firms of all sizes.
- Favorable Outcomes: Barr & Douds is committed to achieving favorable outcomes for their clients, tirelessly advocating for justice and protecting your financial interests.
- Reputation: The firm has built a strong reputation for excellence, professionalism, and unwavering advocacy, making us a trusted choice in the field of securities litigation.
Choosing Barr & Douds Attorneys means putting your case in the hands of skilled professionals who are dedicated to achieving the best possible results for you.
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Don't delay, schedule your free consultation with Danville securities and FINRA arbitration lawyers today and get the legal guidance you need.
- Are investors second guessing your advice?
- Has fraud destroyed your portfolio?
- Are FINRA investigators knocking?
- Are your former employees now your competitor?
Frequently Asked Questions
These questions and answers provide a broad overview of securities arbitration. They are not legal advice. All potential cases and circumstances are different, so please consult with a lawyer about your specific matter.