If something goes wrong in your relationship with your broker, first talk with the broker to see whether it is a correctable mistake.
If that isn’t fruitful, go to the branch manager. You can talk with the manager on the telephone, but also write everything down.
If that doesn’t satisfy you, go to the brokerage firm’s compliance office, often located elsewhere.
That failing, look into arbitration at the NASD or the New York Stock Exchange. The NASD Dispute Resolution’s hotline number is 212-858-4400 and its Web site explaining the claims process is www.nasdadr.com. Its new online claim filing system can be accessed at http://www.nasdadr.com/online(underscore)filing.asp.
If you use NASD Dispute Resolution, you don’t have to appear in person if your claim is $25,000 or less. Under the NYSE Dispute Resolution process, the threshold is $10,000. The investor site for the SEC is www.sec.gov/investor.shtml, phone number 800-SEC-0330 and address 450 5th St. NW, Washington, D.C. 20549.
“Before you even do business with a broker or firm, use the NASD’s broker check site [www.nasdbrokercheck.com] to check out their past history,” advised Linda Fienberg, president of the NASD Dispute Resolution in Washington, D.C. “Also ask the potential broker for references and follow up on them.”
Investors may also call the NASD at 800-289-9999 to check out a broker.
Look closely at documents you are asked to fill out and sign, particularly the parts about your tolerance for risk and objectives, and retain a copy, Fienberg added.
“Read your brokerage account statements each month when you get them and ask questions about anything you don’t understand,” counseled Susan Wyderko, director of Investor Education for the SEC in Washington, D.C. “We sometimes see investors complain about unauthorized trading in their account which actually involved the sale of their securities to satisfy a margin call, something the brokerage firm is entitled to do.”
Even though the broker may have sold a stock that you would have preferred to keep, in a call on a margin account the action was justifiable, Wyderko added.
“The best thing you can do is keep good records,” said Barbara Roper, director of Investor Protection for the Consumer Federation of America in Washington, D.C. “Your chance of getting your money back goes up dramatically if you can document what happened.”
That includes confirmation slips, account statements, records of conversations that include the dates they occurred.
