Tracy Stoneman - Stoneman Law
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Why Hire a Lawyer?

Why Hire a Lawyer at All?

If you suspect that you have suffered losses as a result of the wrongdoing of your broker or brokerage firm, the first question might actually be, “Why Hire a Lawyer?” The answer is perhaps best summarized in the famous phrase, “A man who is his own lawyer has a fool for a client.” FINRA,used to provide some statistics that reflected how poorly “pro se.”For 2015 and 2016, pro se claimants who took their cases to hearings won only 8% of the time, compared to a 52% win rate by claimants represented by counsel. The bottom line is that if you hire a lawyer, you will obtain much better win rates and settlement rates.

What is Securities/FINRA Arbitration?

The United States Supreme Court ruled in 1987 that any investor opening an account at a broker dealer can be required to sign a document that contains a binding arbitration provision. So as opposed to having the ability to file a case in a court of law, investors have to take their claims through arbitration. Securities arbitrations are now administered through one organization – FINRA and one set of rules applies to those arbitrations.

Arbitration differs the most from a court case in the time involved: the entire arbitration process takes a lot less time than court. Also, the result will be final as the brokerage firms have very limited rights to appeal, whereas court cases can drag on for years. Arbitration is also cheap compared to court since there are no depositions or travel costs except for the arbitration itself. Note: some cases belong in court where, for example, there is no binding arbitration agreement and where the case is a class action.

What is a Securities/FINRA Arbitration Lawyer?

Since 1987, all brokerage disputes have been required to go to arbitration and not court. Consequently, lawyers for both brokerage firms and investors have developed a specialty in this area due to the volume of cases. Each year from 2015 – 2017, roughly 3,500 cases make their way through the FINRA arbitration process. It’s easy to imagine the cadre of lawyers that have had many years to finely tune and perfect their expertise in this unique legal field. By definition, a securities arbitration lawyer primarily focuses on the defense or prosecution of brokerage firm disputes in FINRA arbitrations. (READ - not all securities arbitration lawyers are equal.

Why Hire an Experienced Securities Arbitration Lawyer as Opposed to an Experienced Trial or Business Lawyer?

I have been known to say on many an occasion that a seasoned trial lawyer is a fish out of water in a securities arbitration. Why is that? Because securities arbitrations are a whole different ball game – with different rules, procedures and protocol. The discovery process is the most unusual for a business trial lawyer. A litigator is used to having depositions and interrogatories and very strict, formal codes for what is and is not discoverable. Though FINRA has a Discovery Guide, it is only a guide and one about which quite a bit of gamesmanship has developed. I wrote an article on the subject back in 1990 entitled, “"Forced Arbitration - Perfect Justice? Discovery in Arbitration," that was published in the Securities Arbitration Commentator. Only a securities lawyer like myself who has been fighting these unique discovery battles for over 30 years can adequately represent investors in securities arbitration so that they can obtain what they need to win their case. I have learned that half the battle is in getting the necessary documents from the brokerage firms. Because arbitration is more lax than court, brokerage firms think they can get away with simply not producing harmful documents.

The Arbitrator Selection Process

Another distinct difference between court and arbitration is the arbitrator selection process. Unlike in court where you have a judge or a judge and a jury, in arbitration, there is an arbitration panel – usually three people who are both the judge and the jury. They go through extensive training to become arbitrators, and the securities lawyer who represent investors must have the skill and know the art in getting the best arbitrators on the panel. As a securities lawyer having represented over 1,000 clients in securities arbitration, I have honed a very good methodology in selection.

The First Step You Should Take

If you think you may have a claim against your brokerage firm, I have some advice that has no downside other than your time: Find a securities arbitration lawyer to evaluate your case and not charge you. Most securities lawyers, like myself, will do this for free. I have evaluated many a case where, after a review of documents and conversations with the potential client which activity can sometimes last weeks or months, I advise that no action should be taken. The uncompensated time that I spend is simply the cost of doing business as a securities attorney.

More often, evaluations take significantly less time and you the investor will learn from me, by way of example, whether you have a case that should be pursued, taking into account such factors as the amount of damages that could be recovered, the strength of the liability case, any sympathetic or damaging factors, and the collectability of any award. This is invaluable information that’s free for the taking! And for you, the potential claimant and investor, though you may get an answer you didn’t want to hear – like you should not pursue your case - you do come away with the benefit of going on with your life, knowing that an experienced evaluated your case and declined it.

How are Securities Arbitration Attorneys Paid?

Most securities arbitration lawyers are compensated on a contingency basis – they receive a percentage of your recovery only if you recover. Many times, since the case itself is about the loss of the investors’ money, the investor often doesn’t have the financial means to hire a lawyer on an hourly basis. The benefits of a contingency fee relationship to you the investor are that a) you are not out any lawyers’ fees if you lose and b) your lawyer’s interests are aligned with yours when, for example, evaluating the advisability of a settlement.

But contingency is not the only way to hire a securities arbitration lawyer and the nice thing is that the choice is YOURS, not the lawyers. In fact, the Colorado ethical rules that govern lawyers in the state of Colorado require that the following be provided to clients who agree to a contingency fee:

Type of Attorney Fee Agreements : I have been informed and understand that there are several types of attorney fee arrangements: (1) time based; (2) fixed; or (3) contingent. "Time based" means a fee that is determined by the amount of time involved, such as so much per hour, day, or week. "Fixed" means a fee that is based on an agreed amount regardless of the time or effort involved or the result obtained. "Contingent" means a certain agreed percentage or amount that is payable only upon attaining a recovery percentage or amount that is payable only upon attaining a recovery regardless of the time or effort involved. I understand I have the right to choose the type of attorney fee arrangement.

Realize though that just because you may choose to have an hourly or contingency fee arrangement, that doesn’t mean that the lawyer has to accept it. There have been many a case that I have had where I have advised the client that the case had too many warts for my comfort in taking the case on contingency. In those situations, I will refer the case to another lawyer since who knows, perhaps another lawyer might be willing to take the case on contingency.

And there are still other payment options called “hybrid” agreements. For example, I may allow a client to pay me hourly up through the discovery phase of the case (where we often discover smoking gun documents that dramatically help the case) and then switch to contingency. Or, I might accept a case where I am paid a lower hourly rate and a lower contingency fee. There are many, many options for investors in how they can have their cases handled. I highly suggest you read on my homepage the section where I highlight why you should hire me as your securities lawyer as opposed to some of my competitors.”

I highly suggest you read on my homepage the section where I highlight why you should hire me as your securities lawyer as opposed to some of my competitors. ( Read about the differences )

Contact Ms. Stoneman, Stoneman Law (800) 783-0748 Free consultation, Nationwide Representation

Client Reviews
★★★★★
If you suspect securities or brokerage fraud against your hard-earned investments and need an advocate, call Tracy Pride Stoneman - NOW! I was a victim of churning, improper sale of unsuitable private placements, compliance violations, and more. I blamed myself at first and didn't think I had a case, but I was referred to Tracy after another lawyer balked, thinking all was lost. She took the emotion out of it, got down to the facts, made the case, and in hands-on fashion worked hard for the best result possible. She's an excellent communicator and the kind of experienced securities arbitration lawyer you need in your corner. Ms. Stoneman achieved a settlement for me that far exceeded expectations. She has my highest recommendation. Jeffrey B.
★★★★★
Tracy was a wonderful lawyer in my and my husband's huge case against Prudential Securities. She was relentless in going after the stockbroker and firm, determined to obtain all of the documents that helped our case and hurt theirs (that's why the firm didn't want to produce them!). No matter what curve ball the brokerage firm threw, Tracy came up with an angle to overcome it. My husband always commented how smart Tracy was in handling our case. Throughout it all, Tracy was extremely cheerful and easy to work with - unlike most lawyers I know! Carolyn W.
★★★★★
I think that you did a great job for the Tylers, and I believe you are one of the most organized and effective attorneys I have worked with. John B.