How to Report Broker Misconduct—And What Happens Next
Investors place their trust—and often their life savings—in the hands of financial professionals who are expected to act in those investors’ best interests. But when that trust is broken, the consequences can be devastating. From unauthorized trades and unsuitable investments to outright fraud, broker misconduct can strip investors of their financial security and peace of mind.
At Silver Miller, we represent clients nationwide who have been harmed by unethical, negligent, or fraudulent brokers. If you believe your financial advisor or broker has acted improperly, it’s crucial to understand how to report the misconduct—and what happens next.
What Is Broker Misconduct?
Broker misconduct encompasses a wide range of unethical or illegal behaviors by financial advisors, including:
- Unsuitable investment recommendations
- Excessive trading or “churning” for commissions
- Misrepresentation or omission of material facts
- Unauthorized transactions
- Failure to diversify accounts
- Selling away (unauthorized investment sales outside the firm)
- Breach of fiduciary duty
- Negligence or failure to supervise
These actions violate the broker’s duty of fair dealing and can result in significant financial losses—particularly for elderly or vulnerable investors.
How to Report Broker Misconduct
If you suspect you’ve been a victim of broker misconduct, taking action early is critical. Here’s what to do:
1. Document the Misconduct
Gather account statements, trade confirmations, emails, texts, and notes from any relevant conversations. Keep a timeline of events and any suspicious activity.
2. Report to the Financial Institution
Notify the brokerage firm directly. While this may not result in resolution, it’s important for establishing a record of your concerns.
3. File a Complaint with FINRA
The Financial Industry Regulatory Authority (FINRA) oversees broker-dealers and enforces rules designed to protect investors. You can file an investor complaint through FINRA’s online portal. This may trigger an investigation, particularly if a broker has multiple complaints on record.
Note: Filing a complaint with FINRA can help expose wrongdoing, but it does not result in personal financial recovery.
4. Contact an Attorney
To pursue monetary recovery, you’ll need to file a legal claim—typically through FINRA arbitration. This is a separate process from filing a complaint and is your best option for seeking compensation.
What Happens After You Report Misconduct
Once misconduct is reported and legal action is initiated, several things will follow:
Case Evaluation
A securities attorney will review your documents, trading history, and communications to determine if the broker’s actions were improper and actionable under FINRA rules.
Filing a FINRA Arbitration Claim
If legal grounds exist, your attorney will file a Statement of Claim with FINRA. This outlines the facts of your case, the alleged violations, and the compensation you’re seeking.
Discovery and Pre-Hearing Preparation
Both sides will exchange documents and information. Your attorney will build a compelling case using expert witnesses, forensic analysis, and detailed records.
Settlement Negotiations
Many claims are resolved through negotiated settlements before reaching an arbitration hearing. An experienced attorney will work to maximize your recovery.
Arbitration Hearing
If the case isn’t settled, it proceeds to a hearing where a panel of neutral arbitrators hears both sides and issues a binding decision.
What You May Recover
Through FINRA arbitration, you may be eligible to recover:
- Losses from unsuitable investments or excessive trading
- Reimbursement of fees, commissions, or penalties
- Legal costs and arbitration filing fees
- Damages for breach of fiduciary duty or negligence
The outcome depends on the strength of the evidence and the representation you receive.
Why Legal Representation Matters
Navigating broker misconduct claims on your own can be overwhelming—especially when dealing with powerful brokerage firms and their legal teams. Having an experienced FINRA arbitration attorney gives you a significant advantage.
At Silver Miller, we are recognized for our aggressive representation of investors harmed by fraud, negligence, and financial abuse. We handle the legal complexities so clients can focus on recovery and moving forward.
Contact Silver Miller
If you’ve suffered financial losses due to broker misconduct, don’t wait. There are strict time limits for filing claims, and the sooner you act, the better your chances of recovery.
Contact Silver Miller for a free consultation. Our experienced securities attorneys will evaluate your situation, explain your rights, and fight for the justice and compensation you deserve.
