FINRA is in a position where they have to sometimes field questions involving securities and their risks, especially if a securities class action lawsuit is brought up. The greater the claim, the more questions FINRA is asked, particularly with regards to the outcome. Class action lawsuits scare a lot of people, especially when clients have a lot of money at stake.
Chuck made some investments. Now due to some regulatory issues, his investments are being hit hard. Below are some things Chuck needs to consider when making his choice.
1) Chuck will need to go through Federal court, as opposed to settling the problem in a small resolution place. Chuck’s claim is that he has suffered some kind of economic growth due to securities violations with regards to his investments.
Chuck bought some stock in a company, a few years back, and now the company is facing hardships. Chuck is facing monetary issues due to that imbalance. There will be at least one plaintiff, maybe more, if the case or cases require it.
2) There is a difference between a FINRA regulation violation and an investment lawsuit. A securities class action suit involves trying to get some kind of monetary value for the people who have been harmed by the violations.
The FINRA cases only stand a 50/50 chance for investors like Chuck to get their money back. Chuck needs to know that his claims are not a guaranteed open and shut case. The class action cases make sure that Chuck will receive what is owed to him.
Chuck needs to go with the second choice because he stands a better chance of getting his money.
3) Chuck will be notified if and when he is part of the class action suit. Chuck will get the notification through the mail. The paperwork will tell him everything he needs to know, including whether or not he needs to show up as a defendant.
4) Chuck may opt out of joining the rest of the people who have the same problem he has. There may be 20 other people who suffered a monetary loss due to investments. Chuck has to let them know whether he is joining the rest of the group or not.
What if he does not join the others? He has to provide a valid reason for his choice. He may have a reason that sets him apart from the other 20 people. Chuck must submit in written form his reasons. The court will make a choice on whether or not his reasons are valid based on what he submits.
5) Chuck may be part of the FINRA and the securities platform. Say that Chuck has already been given money for his losses with the FINRA. Chuck can still seek restitution for his securities. Some assume that they need to waive their right to the other money. Chuck is still entitled to that money.
6) FINRA cannot give Chuck advice on what he should or should not do. Chuck has to decide for himself whether to participate in the class action suit. Chuck has to make the choice on whether or not he takes the money they offer him.
FINRA is a position where it is considered a conflict of interest if they offer advice to their clients. According to FINRA, Chuck should speak with his lawyer before he moves forward with his decisions.