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What can I
do if I am unsure about whether I have a valid claim?
The first thing you should do is to take our
test to determine whether you may have been the victim
of fraud or other misconduct. [Click
Here] If you believe you may have been the victim
of securities fraud, you should contact an experienced
attorney who will evaluate your case and advise you
on your options.
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How will
Hartzell & Whiteman, L.L.P. evaluate my case?
Hartzell & Whiteman, L.L.P. is a law firm that assists
investors to prosecute securities claims through litigation
and arbitration. Our lawyers handle everything from
complex federal and state court litigation, including
class actions, to individual customer arbitrations.
Due to our experience in these matters, we are frequently
able to evaluate an investor's case during an initial
telephone call or meeting. If it appears that the case
requires more thorough investigation, we will ask the
client to let us review documents such as promotional
materials, account statements, trade confirmations and
the like. We are often able to conduct additional investigation
through the internet or other research sources available
to us. After we review your case we will meet with you
again to discuss your options.
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Will the
initial consultation cost me anything?
No.
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How will
I be charged for attorneys fees in the event you take
my case?
You should know that lawyers typically work on
one of three fee arrangements: contingency fee, hourly
fee or flat fee. In a contingency fee arrangement, the
lawyer will charge a percentage, usually 25% to 40%,
of the amount of any recovery received from the defendant.
While the amount of a contingency fee is sometimes larger
than an hourly fee would be, the lawyer would receive
nothing if the case turned out to be unsuccessful. Hourly
fees are computed based on the time expended by the
lawyer and his staff times their hourly billing rates
and are payable regardless of the outcome of the case.
Sometimes a lawyer will charge a flat fee for a case,
or for a phase of a case.
The fee agreement, and the amount of the expected fee,
is something that the client and lawyer need to discuss
thoroughly before any significant legal services are
rendered. It is our standard practice to reduce the
fee agreement to writing to avoid possible misunderstandings.
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What costs will
I have to pay in addition to attorney fees?
Typically, the client is asked to agree to bear
all expenses associated with the case. These expenses
include such things as filing fees, deposition expenses,
copying costs, long-distance telephone charges, delivery
charges, expert's fees for consultation or testifying,
and any travel expenses. The lawyer should advise you
concerning anticipated expenses.
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What
is a class action lawsuit?
A class action lawsuit is one in which one or
more individuals (the "named plaintiffs")
sue on behalf of themselves and a class of persons whose
claims are similar to those of the named plaintiffs.
A class action is appropriate in cases in which the
named plaintiff alleges that the defendant committed
the same wrong to large group of persons. The advantages
of class action are that the claims of a large group
of injured persons can be decided in one suit rather
than in hundreds or thousands of individual lawsuits.
By aggregating claims with those of the entire class,
the named plaintiff is frequently able to pursue a claim
that would be too expensive to prosecute on an individual
basis.
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What
is a shareholder derivative action?
Shareholders have a limited right to participate
in the governance of a corporation. Even if a shareholder
believes that corporate management has abused its power
or received illegal profits, the shareholder may not
be permitted to sue in his own name due to the fact
that the claim actually belongs to the corporation.
In that instance, the shareholder may be able to sue
the company's officers and directors in the name of
the corporation. The lawsuit is called a "derivative"
action because the shareholder is not suing the corporation
in his own name, but rather he is bringing a claim on
behalf of the corporation to recover damages suffered
by the corporation. In a shareholder derivative suit,
all shareholders benefit if a recovery is received by
the corporation. Typically, the attorney who handled
the case is compensated out of the corporation's recovery.
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When am I entitled
to bring my claim in federal or state court?
You are entitled to file your complaint in court unless
you signed a written customer agreement that contains
an arbitration clause. Because most broker-dealer firms
require customers to sign account agreements that contain
arbitration clauses, most securities disputes involving
broker-dealer firms are resolved in arbitration.
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What
is securities arbitration?
In 1987, the U.S. Supreme Court held that brokerage
firms could enforce pre-dispute arbitration clauses
contained in their standard form customer agreements.
Virtually all brokerage firms' customer agreement forms
now contain arbitration clauses. As a result, most disputes
between brokerage firms and customers are arbitrated.
Arbitration is a private dispute resolution process
in which three arbitrators are appointed to decided
the merits of a case. One of the arbitrators is required
to be associated, presently or formerly, with an NASD
member. The purpose of having an "industry representative"
on the panel is to assure that the panel will have the
expertise and experience necessary to understand the
transactions and practices involved in the case. The
other two panel members are typically professionals,
such as lawyers, accountants, investors or retired judges,
who have an interest in securities or dispute resolution.
In an arbitration, the parties are typically represented
by counsel and present evidence through testimony and
documents as in a court proceeding.
A significant except to mandatory arbitration exists
for class action claims.
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Who sponsors
securities arbitration?
The largest sponsor of securities arbitration is the
National Association of Securities Dealers, Inc. ("NASD"),
which is a self-regulatory organization whose members
are brokerage firms. The NASD has been granted authority
by Congress through the Securities and Exchange Commission
to regulate its members and individual brokers. Other
organizations, such as the New York Stock Exchange,
also conduct securities arbitrations.
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What
are the advantages of securities arbitration?
Arbitration has a number of advantages. Arbitration
is generally less time consuming and less expensive
than court, due to the fact that deposition discovery
and motions practice is rare in arbitration. Pre-hearing
procedures are more limited in arbitration than in court,
and arbitrations are typically resolved in 12 to 18
months as opposed to 18 months to two years or more
for court cases. However, unlike court, formal rules
of evidence and procedure are inapplicable, and therefore
the process is often more streamlined and less contentious.
Many arbitration hearings are resolved in less than
two full days of hearing time.
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What
are the disadvantages of securities arbitration?
The most significant disadvantage is that the parties
give up their right to trial by jury. In addition, the
parties do not have the procedural and evidentiary protections
provided through our court system. Limited discovery
can be disadvantageous. Arbitration requires the payment
of significant filing and hearing fees.
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How long
does the process take?
Court cases typically take from 18 months to two years
or more. An advantage of arbitration is that cases are
resolved more quickly, generally within 12 to 18 months.
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Do investors
ever win in arbitration?
Yes. According to a recent study by the U.S. General
Accounting Office, customers are successful in being
awarded some damages in approximately 55% of the cases
that are decided by an arbitration panel. In addition,
approximately 50% to 60% of the cases that are filed
are settled before an arbitration decision is rendered.
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Should I
contact my broker-dealer about settling the case?
Experience has shown that brokerage firms are generally
unwilling to make settlement offers before a claim has
been filed. Brokerage firms sometimes seek to delay
matters by suggesting that the customer write a complaint
letter. After receiving the letter, the firm then spends
considerable time "reviewing" the matter prior
to denying the claim some months later by means of a
terse, non-responsive letter. We recommend that customers
not write complaint letters to their brokerage firms
without the assistance of a lawyer. Such efforts rarely
bear fruit, and while time is passing the statute of
limitations continues to run.
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Can the
regulatory authorities assist in recovering losses?
The regulatory authorities, such as the SEC, the NASD
and state securities regulators, are in the business
of enforcing their rules and regulations through disciplinary
processes. They are not set up to help individual customers
recover their losses, and efforts to enlist the assistance
of regulators is often a source of significant delay.
We do encourage our clients to cooperate fully with
law enforcement authorities and regulators, and to report
misconduct where appropriate, but such contacts should
be done in consultation with the lawyer.
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Does it matter
when I made the investment?
Yes. It is to your advantage to act quickly if you believe
your money has been mishandled. In addition, if you
allow too much time to pass your claim may become barred
by the applicable statutes of limitations. Contact us
if you wish to receive more information about statutes
of limitations.
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How do I get
started?
We would like to have the opportunity to discuss your
concerns with you on a confidential, no cost basis.
Please contact us.
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