The Financial Industry Regulatory Authority (“FINRA”) issued an Investor Alert reminding investors to carefully review their account statements and trade confirmations for potential red flags. Securities regulators take the accuracy of account documents very seriously. A careful review of these documents can alert investors to errors, or possible misconduct, by financial professionals, such as unauthorized trading or improper charges for handling transactions.
FINRA identified some of the key elements and red flags to watch for:
• Statements that look unprofessional, crooked, or altered in any manner. Fraudsters sometimes insert a logo from a legitimate brokerage firm onto their own fake statement.
• Statements that contain no or inconsistent specified end dates or statement periods. Statement end dates should follow a consistent pattern, for example, the last business day of every month.
• An account number that does not match previous statements.
• Investor’s address is wrong or outdated.
• The name of the financial professional listed on the statement is unfamiliar.
• The phone number for the financial professional is out-of-service, is always busy or is never answered.
• No clearing firm listed on the statements. A clearing firm is the company that holds an investor’s securities. FINRA rules require that the name and contact information for the clearing firm be listed on account statements.
• The phone number for the clearing firm is out-of-service, is always busy or is never answered.
• Account activity that was not authorized or expected.
• Account performance that seems unrealistic (the returns are always positive.)
• Unfamiliar sources of dividends and interest income.
• Income that appears on the monthly statement but has not been deposited in to the account.
• Account and transaction fees, commissions and charges that seem excessive or are unfamiliar.
• Transaction information on trade confirmations does not match the transaction information on monthly account statements.
• Unauthorized purchases of securities on margin (a loan from the firm secured by the securities purchased).
• Assets believed to have been purchased through the firm, but not listed on the account statements.
• Investment objections, such as growth, speculative, conservative, that do not match the investor’s financial goals.
• Any investment that was the broker’s idea but is reflected on the trade confirmation as “unsolicited.”
Investors who find any inaccuracies, discrepancies or potential red flags should immediately contact their broker or brokerage firm.
The Florida attorneys at McCabe Rabin, P.A. represent investors nationwide in FINRA arbitration matters. Investors nationwide who have incurred recoverable investment losses due to specific failures by stockbrokers and brokerage firms, and who may have a FINRA arbitration claim, may contact the Florida securities lawyers at McCabe Rabin, P.A. for a free and confidential consultation by calling toll free at 877.915.4040 or by e-mail to firstname.lastname@example.org.