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WHEN SHOULD YOU COMPLAIN?

What should you do if you believe that you have a problem with or have been mistreated by your stockbroker, investment adviser or brokerage firm?

  • FRAUD. If you think that youíve been cheated or otherwise taken advantage of by a financial professional, contact a regulatory organization or organizations immediately. Keep in mind that, in most cases, regulators will not be able to get your money back.
  • TRADING ERRORS AND OTHER PROBLEMS. Complain directly to the brokerage or investment advisory firm in writing and keep a copy for your own records. First communicate your concerns to your broker, then to the manager of your brokerís or advisorís office. Keep a copy of the complaint in your records. Follow-up immediately if you do not receive a satisfactory response to your complaint. If you get no response to your letter or you feel like the firm is stalling you should complaint to the appropriate regulatory agency or agencies.

WHERE SHOULD YOU FILE A COMPLAINT?

First complain to the state securities agency in the state where your live. You can also complain to one of the following two organizations: the U.S. Securities and Exchange Commission (SEC) or the National Association of Securities Dealers (NASD). Why not complain to both NASD and the SEC? The following explains which agency you should contact and when.

Your State Securities Agency

Every state has a regulatory agency that is in charge of grassroots consumer protection, including, in most cases, regulation of stockbrokers, investment advisors and brokerage firms. To find the state securities agency where you live, go to the North American Securities Administrators Association ďFind a RegulatorĒ page and look up your state. Every state agency listed there has a phone number or email address that you can use to contact them.

National Association of Securities Dealers

The NASD is a federally chartered industry self regulatory organization (SRO) that oversees brokerage firms, stockbrokers and investment advisors. NASD is an enforcement organization that operates independently from the Nasdaq stock market. Who should file a NASD customer complaint? A customer complaint may be filed by an investor, or a person acting on behalf of an investor, who feels that he or she has been dealt with improperly by a stockbroker, investment advisor or brokerage firm. A customer complaint will be most appropriate for individuals who been directly victimized by brokerage firm misconduct.

U.S. Securities and Exchange Commission

The primary mission of the U.S. Securities and Exchange Commission (SEC) is to protect investors and maintain the integrity of the securities markets. The SEC oversees the key participants in the securities world, including stock exchanges, broker-dealers, investment advisors, mutual funds, and public utility holding companies.

  • To file a complaint with the SEC, go to the Commissionís online complaint area (www.sec.gov/complaint.shtml) to find the form that makes the most sense for your case.
  • To forward investment-related spam (junk email) or copies of suspicious postings on stock market message boards, go to enforcement@sec.gov. Complaints about misconduct should be directed to the SECís online complaint form (same link as in previous bullet).

Are you an investor outside of the United States? While the jurisdiction of NASD ends with members of the National Association of Securities Dealers, the U.S. Securities and Exchange Commission deals with any firm that sells securities to U.S. investors, regardless of their location. The SEC Web site features a "warning" that is directed exclusively at foreign investors.

Non-U.S. investors may be able to get more help by visiting the Web site of the International Organization of Securities Commissions to determine which securities regulator outside of the United States is the right one to contact.

HOW SHOULD YOU FILE A COMPLAINT?

Regulators need details to help you. Accurate and complete information is crucial. Though you are not required to furnish any more information than you wish, the key information will include:

  • Your name, mail and email addresses, and telephone numbers.
  • The name, mail and email addresses, telephone numbers, and Web site (or email) address of any individual or company you mention in the complaint.
  • Specific details of who, what, when where and how you were defrauded or encountered problems. . Be as specific about what your broker told you about the investment as possible. It is best to tell your story in chronological order as possible.

Check with the agency where you are complaining to see if they have a specific complaint form. This may save you time later.