If an individual investor has a dispute with a FINRA brokerage firm stock broker, he/she most likely will have to arbitrate through FINRA's Dispute Resolution system. FINRA Arbitration holds arbitration hearings in two Virginia cities: Richmond, Virginia and Norfolk, Virginia. Northern Virginia residents may also request a hearing in Washington, D.C.
The Securities Fraud Lawyers at Greco & Greco, P.C. regularly represent Virginia residents in disputes with their financial advisors and securities salespersons, involving claims of suitability, violations of FINRA Rules, negligence, fraud, misrepresentation, ponzi schemes, breach of fiduciary duty, professional malpractice, and other claims. Please contact Scott Greco for a free attorney consultation about your case. We serve clients from all areas of Virginia, including Northern Virginia, Virginia Beach, Chesapeake, Norfolk, Fairfax, Abington, Arlington, Richmond, Newport News, Hampton Roads, Alexandria, Roanoke, Suffolk, Lynchburg, Centreville, Dale City, Reston, Loudoun/Leesburg, Harrisonburg, Ashburn, McLean, Henrico, Chesterfield, Staunton, Williamsburg and Charlottesville.
The Virginia State Corporation Commission, Division of Securities, in Richmond, Virginia, regulates the sales of securities in the state of Virginia. Its website provides information on state securities Statutes and Rules, and information on how to file a complaint.
Virginia's Securities Act is similar to many states' Acts with regard to providing for civil liability for the commission of securities fraud in the sale of securities (including untrue statements of material fact or omissions of material fact). The statute provides for rescission (or damages if the investor no longer owns the security), reasonable attorney"s fees, and interest.
Common Legal Claims by investors against their financial advisors in Virginia are:
A. Suitability. Prior to recommending the purchase of specific investments or a specific investment strategy to a customer, a stock broker is required to determine that the investments are suitable to that particular investor. A suitability determination is based upon many different factors such as age, investment objectives, risk tolerance, employment situation, needs, income, assets, and investment experience. If an advisor’s recommendations of unsuitable investments result in the investor incurring significant losses, that investor may have a suitability claim against the broker and his/her firm.
B. Churning. Churning occurs when a broker exercises control over an account and allows the broker's interest in making commissions to override the investor's interests in the account. When a broker makes a buy or sell recommendation for an account, that broker should have the investor's best interests based on their investment objectives in mind. If the broker makes excessive buy and sell recommendations for the purposes of generating commissions for the broker by each buy and sell, that broker is engaged in churning the account. Excessive turnover in the assets of the account and/or a high cost to equity percentage are often a sign of churning.
C. Unauthorized Trading. Generally, an investor can have two kinds of an account, non-discretionary and discretionary. In a typical non-discretionary account, the broker must consult with and obtain the consent of the customer prior to making a trade in the account. Unauthorized trading occurs when a broker makes trades in a non-discretionary account without the consent of the customer.
D. Securities Fraud. Most of the claims in this list are subsets of securities fraud which is employing a device, scheme, or artifice to defraud, or obtaining money by means of untrue statements of material facts and failure to state material facts in violation of state blue sky / securities laws or federal law (Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5). If a broker makes false statements to an investor or fails to advise the investor of certain important facts, the investor may be able to recover losses incurred resulting from this fraud.
E. Margin Disputes. Margin trading involves borrowing money from the brokerage firm to purchase securities greater in value than the equity in an investor's account. Due to the risky nature of trading on the margin, disputes with brokers often arise as a result of significant losses. If a broker trades on the margin without the knowledge or consent of the investor, the investor may be able to recover the losses resulting from the fraud.
F. Ponzi Scheme Investment Scams. Ponzi schemes generally involve promises of high returns by salespersons over short periods of time, but in reality result in stealing from Peter to pay Paul. Because returns to investors in ponzi schemes are often paid out of new investment monies from new investors, the scheme will ultimately fall apart when the new investors dry up, leaving all investors often holding a worthless investment. Financial Advisors and their brokerage firms who sell ponzi scheme fraudulent investments may be found liable for selling unsuitable investments, securities fraud, sale of unregistered securities, failure to supervise, and other legal violations.
G. Failure to Supervise Broker. FINRA firms have a duty to supervise their registered brokers, and their failure to do so may form the basis of various legal claims against them. FINRA Rule 3110 states: Each member shall establish and maintain a system to supervise the activities of each registered representative, registered principal, and other associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations, and with applicable FINRA Rules. Final responsibility for proper supervision shall rest with the member.
Examples of legal grounds for liability of Broker-Dealers in these situations include:
a) under tort and agency law, principals can be found liable for the acts of their agents even if they are entirely innocent and have received no benefit from the transaction;
b) a broker's Broker-Dealer can also be found liable as a control person of that broker under state and federal securities laws; and
c) claims can be pursued in arbitration based on violations of FINRA rules including Rules related to supervision, suitability, and outside business activities.
Obviously, this list is by no means comprehensive and all of the legal requirements of the above claims stated are not completely set out. This web site is not intended to give legal advice or create an attorney-client relationship. Please contact our securities lawyers for a free consultation if you believe your financial advisor broker may be liable under one of the above claims, or for other wrongful conduct.
The Civil Liability section of the Virginia Securities Act is as follows:
Va. Code 13.1-522. Civil liabilities.
A. Any person who: (i) sells a security in violation of 13.1-502, 13.1-504 A, 13.1-507 (i) or (ii), 13.1-510 (e) or (f), or (ii) sells a security by means of an untrue statement of a material fact or any omission to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they were made, not misleading (the purchaser not knowing of such untruth or omission), and who shall not sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of such untruth or omission, shall be liable to the person purchasing such security from him who may sue either at law or in equity to recover the consideration paid for such security, together with interest thereon at the annual rate of six percent, costs, and reasonable attorneys' fees, less the amount of any income received on the security, upon the tender of such security, or for the substantial equivalent in damages if he no longer owns the security.
B. Any person who (i) engages in the business of advising others, for compensation, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing, or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities in willful and material violation of 13.1-503, subsection A of 13.1-504, or of any rule or order under 13.1-505.1, or (ii) receives, directly or indirectly, any consideration from another person for advice as to the value of securities or their purchase or sale, whether through the issuance of analyses, reports or otherwise and employs any device, scheme, or artifice to defraud such other person or engages in any act, practice or course of business which operates or would operate as a fraud or deceit on such other person, shall be liable to that person who may sue either at law or in equity to recover the consideration paid for such advice and any loss due to such advice, together with interest thereon at the annual rate of six percent from the date of payment of the consideration plus costs and reasonable attorney's fees, less the amount of any income received from such advice and any other economic advantage.
C. Every person who directly or indirectly controls a person liable under subsection A or B of this section, including every partner, officer, or director of such a person, every person occupying a similar status or performing similar functions, every employee of such a person who materially aids in the conduct giving rise to the liability, and every broker-dealer, investment advisor, investment advisor representative or agent who materially aids in such conduct shall be liable jointly and severally with and to the same extent as such person, unless able to sustain the burden of proof that he did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which the liability is alleged to exist. There shall be contribution as in cases of contract among the several persons so liable.
D. No suit shall be maintained to enforce any liability created under this section unless brought within two years after the transaction upon which it is based; provided, that, if any person liable by reason of subsection A, B or C of this section makes a written offer, before suit is brought, to refund the consideration paid and any loss due to any investment advice provided by such person, together with interest thereon at the annual rate of six percent, less the amount of any income received on the security or resulting from such advice, or to pay damages if the purchaser no longer owns the security, no purchaser or user of the investment advisory service shall maintain a suit under this section who has refused or failed to accept such offer within thirty days of its receipt.
E. Any tender specified in this section may be made at any time before entry of judgment.
F. Any condition, stipulation or provision binding any person acquiring any security or receiving any investment advice to waive compliance with any provision of this chapter or of any rule or order thereunder shall be void.
G. The rights and remedies provided by this chapter shall be in addition to any and all other rights and remedies that may exist at law or in equity.
FINRA securities brokerage firms with their main offices in Virginia:
AGECROFT PARTNERS, LLC
103 CANTERBURY ROAD, RICHMOND, VA 23221-3211
ALL FUNDS, INC.
1444 ORANGE TURNPIKE, MONROE, NY 10950-3716
Mailing Address: PO DRAWER H, VALLEY COTTAGE, NY 10989
ALLIED BEACON PARTNERS, INC.
7501 BOULDERS VIEW DR, SUITE 601, RICHMOND, VA 23225
ALPHA OMEGA CAPITAL SECURITIES, LLC
7400 BEAUFONT SPRINGS DR., SUITE 105, RICHMOND, VA 23225
ANDERSON & STRUDWICK, INCORPORATED
707 E. MAIN STREET 20TH FLOOR, RICHMOND, VA 23219
Mailing Address: P.O. BOX 1459, RICHMOND, VA 23218-1459
BGB SECURITIES, INC.
1100 NORTH GLEBE RD-STE 1040, ARLINGTON, VA 22201-4798
BIA CAPITAL STRATEGIES, LLC
15120 ENTERPRISE COURT, SUITE 100, CHANTILLY, VA 20151
Mailing Address: 15120 ENTERPRISE COURT, SUITE 100, CHANTILLY, VA 20151
BLUESTONE CAPITAL PARTNERS, LLC
1650 TYSONS BOULEVARD, SUITE 1530, MCLEAN, VA 22102
BUTLER CAPITAL INVESTMENTS, LLC
222 COURT SQUARE, CHARLOTTESVILLE, VA 22902
CAPITAL BROKERAGE CORPORATION
6620 WEST BROAD STREET, BUILDING 2, RICHMOND, VA 23230
CAPITOL SECURITIES & ASSOCIATES, INC.
100 CONCOURSE BLVD., SUITE 101, GLEN ALLEN, VA 23059
CAPITOL SECURITIES MANAGEMENT, INC.
100 CONCOURSE BLVD, SUITE 101, GLEN ALLEN, VA 23059
CARY STREET PARTNERS LLC
1210 EAST CARY STREET, SUITE 300, RICHMOND, VA 23219
CHEVAL CAPITAL, INC.
901 N. PITT STREET-110, ALEXANDRIA, VA 22314
CLEARVIEW CORRESPONDENT SERVICES, LLC
8006 DISCOVERY DRIVE, SUITE 200, RICHMOND, VA 23229
CORTVIEW CAPITAL SECURITIES LLC
1021 EAST CARY ST, 11TH FLOOR, RICHMOND, VA 23219
DAVENPORT & COMPANY LLC
ONE JAMES CENTER, 901 E. CARY STREET, RICHMOND, VA 23219
Mailing Address: P.O. BOX 85678, RICHMOND, VA 23285-5678
DMG SECURITIES, INC.
GREAT FALLS PROFESSIONAL CENTER 737 WALKER ROAD, SUITE3, GREAT FALLS, VA 22066
Mailing Address: GREAT FALLS PROFESSIONAL CENTER 737 WALKER ROAD, SUITE 3, GREAT FALLS, VA 22066
DOMINION PARTNERS, L.C.
4801COX ROAD, STE 104, GLEN ALLEN, VA 23060
EWING BEMISS & CO.
901 EAST BYRD STREET SUITE 1500, RICHMOND, VA 23219-4033
FBR CAPITAL MARKETS & CO.
1001 19TH STREET NORTH, ARLINGTON, VA 22209
FBR INVESTMENT SERVICES, INC.
1001 NINETEENTH STREET NORTH, ARLINGTON, VA 22209
FINANCIAL SECURITY MANAGEMENT, INCORPORATED
575 LYNNHAVEN PARKWAY, SUITE 310, VIRGINIA BEACH, VA 23452
FIRST DOMINION CAPITAL CORP.
8730 STONY POINT PARKWAY, BUILDING III, SUITE 205, RICHMOND, VA 23235
Mailing Address: 8730 STONY POINT PARKWAY, SUITE 205, RICHMOND, VA 23235
FIRST GEORGETOWN SECURITIES, INC.
1700 DIAGONAL RD., # 200, ALEXANDRIA, VA 22314
FOLIOFN INVESTMENTS, INC.
8180 GREENSBORO DR, 8TH FLOOR, MCLEAN, VA 22102
GIT INVESTMENT SERVICES, INC.
1700 NORTH MOORE STREET, SUITE M1E, ARLINGTON, VA 22209-1903
GOULD CAPITAL, LLC
5245 CATTERTON ROAD, FREE UNION, VA 22940
GUIDANCE SECURITIES, LLC
11107 SUNSET HILLS ROAD, SECOND FL, RESTON, VA 20190
Mailing Address: 11107 SUNSET HILLS ROAD, RESTON, VA 20190
GUIDANCE SECURITIES, LLC
11107 SUNSET HILLS ROAD, SECOND FL, RESTON, VA 20190
Mailing Address: 11107 SUNSET HILLS ROAD, RESTON, VA 20190
HAMPTON HEDGE FUND MARKETING, LLC
2605 GENEVA HILL COURT, OAKTON, VA 22124
HARRIS WILLIAMS & CO.
1001 HAXALL POINT, 9TH FLOOR, RICHMOND, VA 23219
INVESTORS SECURITY COMPANY, INC.
127 E. WASHINGTON STREET, SUITE 101, SUFFOLK, VA 23434
JAMES RIVER SECURITIES CORP.
58 BROAD STREET ROAD, MANAKIN-SABOT, VA 23103-2213
KINGSBRIDGE CAPITAL CORP.
12407 RIDGE RD, KING GEORGE, VA 22485
KIPPSDESANTO & COMPANY
1600 TYSONS BOULEVARD, SUITE 375, MCLEAN, VA 22102
LARA, SHULL & MAY, LLC
7600 LEESBURG PIKE, SUITE 120 EAST, FALLS CHURCH, VA 22043
MANNA CAPITAL MANAGEMENT
6521 ARLINGTON BLVD., SUITE 502, FALLS CHURCH, VA 22042
MARRIOTT SECURITIES, LLC
THREE JAMES CENTER, 1051 EAST CARY STREET, SUITE 1430, RICHMOND, VA 23219
MARTIN VENTURES LLC
351 RIVER BEND RD, GREAT FALLS, VA 22066
MASON SECURITIES, INC.
11130 SUNRISE VALLEY DRIVE, SUITE 200, RESTON, VA 20191-5321
MATRIX PRIVATE EQUITIES, INC.
11 SOUTH 12TH STREET, 3RD FLOOR, RICHMOND, VA 23219
MAYMONT PARTNERS, INC.
1801 LIBBIE AVE, SUITE 104, RICHMOND, VA 23226
MCKINNON & COMPANY, INC.
999 WATERSIDE DRIVE, SUITE 1200, NORFOLK, VA 23510
Mailing Address: 999 WATERSIDE DRIVE, SUITE 1200, NORFOLK, VA 23510
MCLAUGHLIN RYDER INVESTMENTS, INC.
1421 PRINCE STREET, SUITE 400, ALEXANDRIA, VA 22314
MCLEAN SECURITIES, LLC
7900 WESTPARK DRIVE, SUITE A320, MCLEAN, VA 22102
MEDALIST SECURITIES INC.
100 SHOCKOE SLIP, 2ND FL, RICHMOND, VA 23219
MONETA SECURITIES CORPORATION
15413 CHAMPIONSHIP DRIVE, HAYMARKET, VA 20169
Mailing Address: PO BOX 909, HAYMARKET, VA 20168
MUTUAL FUNDS INVESTMENT COMPANY
16176 POINT BEVERLY COURT, MONTPELIER, VA 23192
Mailing Address: PO BOX 364, MONTPELIER, VA 23192
NAVY FEDERAL BROKERAGE SERVICES, LLC
1007 ELECTRIC AVENUE, VIENNA, VA 22180
NORTHWEST FINANCIAL GROUP
200 SPRING STREET, SUITE 120, HERNDON, VA 20170
PACE FINANCIAL SERVICES, LLC
4401 FAIR LAKES COURT, FAIRFAX, VA 22033-3848
Mailing Address: 4401 FAIR LAKES COURT, FAIFAX, VA 22033-3848
PARCHMAN, VAUGHAN & COMPANY, L.L.C.
1040 PARK AVENUE, SUITE 120, BALTIMORE, MD 21201
POTOMAC SECURITIES, LLC
44081 PIPELINE PLAZA, #320, ASHBURN, VA 20147
PRESIDIO SECURITIES, INC.
3 RIVER PLACE, LEXINGTON, VA 24450
RE INVESTMENT CORPORATION
4301 WILSON BOULEVARD, ARLINGTON, VA 22203
ROBINSON & LUKENS, INC.
1319 VINCENT PL, MCLEAN, VA 22101
Mailing Address: P.O. BOX 956, MCLEAN, VA 22101-0956
SAUNDERS RETIREMENT ADVISORS, INC.
7400 BEAUFONT SPRINGS DR SUITE 300, RICHMOND, VA 23225
Mailing Address: 7400 BEAUFONT SPRINGS DRIVE, SUITE 300, RICHMOND, VA 23225
SCOTT & STRINGFELLOW, LLC
901 E. BYRD STREET, RIVERFRONT PLAZA, WEST TOWER, RICHMOND, VA 23219-3310
Mailing Address: P.O. BOX 1575, RICHMOND, VA 23213
SCOTT JAMES GROUP, INC.
6700 ARLINGTON BOULEVARD, FALLS CHURCH, VA 22042
SEALE CAPITAL, INC.
950 N. GLEBE ROAD, SUITE 950, ARLINGTON, VA 22203
SMITHER & COMPANY CAPITAL MARKETS, LLC
4337 COX ROAD, GLEN ALLEN, VA 23060
SPIRE SECURITIES, LLC
12355 SUNRISE VALLEY DRIVE, SUITE 305, RESTON, VA 20191
STERLING BENEFITS BROKERAGE, LLC
4356 BONNEY ROAD, BUILDING 2, SUITE 101, VIRGINIA BEACH, VA 23452
STONECROFT SECURITIES LLC
23253 MEADOWVALE GLEN CT., DULLES, VA 20166
TBC SECURITIES, LLC
2690 CLARENDON BLVD., SUITE 200, ARLINGTON, VA 22201
THOMPSON DAVIS & CO., INC.
15 SOUTH 5TH STREET, RICHMOND, VA 23219
Mailing Address: PO BOX 1854, RICHMOND, VA 23218
TIER ONE PARTNERS, INC.
2500 LANDER CT, MIDLOTHIAN, VA 23113
TRANS AMERICAN EQUITIES CORPORATION
4141 N. HENDERSON RD STE 8, ARLINGTON, VA 22203
U.S. INVESTORS, INC.
515 KING STREET, SUITE 310, ALEXANDRIA, VA 22314
501 EAST FRANKLIN STREET, SUITE 118, RICHMOND, VA 23219
WOODVILLE HALL CAPITAL, LLC
SUITE 201, 2 WEST WASHINGTON STREET, MIDDLEBURG, VA 20117
Mailing Address: PO BOX 113, MIDDLEBURG, VA 20118
WWC SECURITIES, LLC
11911 FREEDOM DRIVE STE 1010, RESTON, VA 20190