Practice area

Securities and Investment Fraud Attorneys in Texas

6 min read

  • 3 firms listed
  • 3 questions answered

Not every investment loss is recoverable, but losses caused by unsuitable recommendations, unauthorized trading, misrepresentations, or fraud can be. The question is usually whether the broker or adviser followed the rules that applied: FINRA rules, the SEC’s Regulation Best Interest for broker-dealers’ recommendations to retail customers (17 C.F.R. § 240.15l-1), fiduciary duties where a fiduciary relationship existed, and state securities law.

Houston and Dallas are major financial centers, and many Texas investors’ disputes with brokers and brokerage firms go to FINRA arbitration rather than court because of arbitration clauses in account agreements. Claims against registered investment advisers that are not FINRA members follow whatever forum the advisory agreement provides, often private arbitration or court. Texas investors also have claims under the Texas Securities Act, now codified in Title 12 of the Government Code. Lending and bank regulation are covered in the guide to banking and finance law attorneys in Texas.

What Securities Attorneys Handle

FINRA Arbitration Claims

Investor-side attorneys file and prosecute FINRA claims for churning, unauthorized trading, misrepresentation and omission, unsuitable or non-best-interest recommendations, failure to supervise, and related claims. They analyze account statements, calculate damages, take part in arbitrator selection, and present the case at hearing. A claim is not eligible for FINRA arbitration if six years have passed since the occurrence or event giving rise to it, though dismissal on that ground does not stop the claimant from pursuing the claim in court (FINRA Rule 12206).

Investment Fraud Recovery

When an adviser steals funds, sells a Ponzi scheme, or sells unregistered securities, attorneys investigate the misconduct, identify responsible parties, including supervising broker-dealers and control persons, and pursue claims in arbitration or court. Forensic accountants help trace money and quantify losses.

Texas Securities Act Claims

The Texas Securities Act provides civil liability for selling securities in violation of registration requirements and for sales by means of an untruth or misleading omission. Suits for untruths or omissions generally must be brought within three years after the untruth or omission is discovered, or should have been discovered with reasonable diligence, and no more than five years after the sale. Registration-based claims generally must be brought within three years after the sale (Government Code § 4008.062).

Regulatory Matters for the Industry

On the industry side, securities attorneys represent advisers and firms in FINRA investigations, SEC and state examinations, Form U4 and U5 disputes, and licensing matters, and advise on compliance with Regulation Best Interest, suitability, and communications rules.

How to Choose a Securities Attorney

FINRA arbitration experience. Ask how many FINRA cases the attorney has taken to hearing and how they approach arbitrator selection.

Forum knowledge. Ask whether your claim belongs in FINRA, another arbitration forum, or court, especially if your adviser is a registered investment adviser.

Industry background. Some securities attorneys previously worked in compliance or as registered representatives, which helps in reading account records and supervisory systems.

Fee terms. Investor-side lawyers commonly work on contingency. Be wary of anyone who guarantees results or pressures you to sign quickly.

Texas Securities Attorneys

Shepherd Smith Edwards & Kantas, LLP

Location: Houston, Texas (national practice)

Website: https://www.investorlawyers.com

Phone: (800) 259-9010

For over 30 years, this Houston-based firm has focused exclusively on representing investors in FINRA arbitration and securities litigation. The attorneys and staff combine more than 100 years of securities industry experience, with many having previously served as FINRA-licensed financial advisors or compliance officers at major brokerage firms. The firm has filed over 2,000 FINRA arbitrations and represents clients nationwide.

Practice Focus: FINRA arbitration, churning and excessive trading, unsuitable investment recommendations, broker theft and conversion, failure to supervise claims, Ponzi scheme recovery, private placement losses

Bakhtiari & Harrison

Location: Dallas, Texas (national practice)

Website: https://bhseclaw.com

Phone: (800) 382-7969

This Dallas-based securities law firm represents investors in FINRA arbitration and litigation involving financial advisor misconduct. The attorneys handle claims against broker-dealers and registered representatives for fraud, misrepresentation, breach of fiduciary duty, and unsuitable recommendations. They represent clients throughout Texas and nationally in disputes involving stocks, bonds, options, mutual funds, REITs, and alternative investments.

Practice Focus: Investment fraud claims, FINRA arbitration, securities litigation, broker misconduct, unsuitable investment recommendations, failure to supervise, unauthorized trading

Greco & Greco, P.C.

Location: McLean, Virginia (represents Texas investors nationally)

Website: https://www.grecogrecolaw.com

Phone: (877) 821-5550

With 85 years of combined experience, this father-son firm represents investors nationwide, including Texas residents, in disputes with financial advisors and broker-dealers. The attorneys handle FINRA arbitration claims with hearings conducted in Houston and Dallas. The firm evaluates cases under both FINRA suitability rules and the newer Regulation Best Interest standard that governs broker recommendations.

Practice Focus: FINRA arbitration, Regulation Best Interest violations, suitability claims, Ponzi scheme recovery, negligence, fraud and misrepresentation, breach of fiduciary duty, professional malpractice

Costs and Fees

Investor-side securities attorneys commonly work on contingency, taking a percentage of any recovery. FINRA charges filing fees that depend on the amount claimed, plus hearing session fees, and some firms advance these costs and recover them from an award. Industry-side regulatory work is usually billed hourly. Ask for a written fee agreement that explains percentages and how costs are handled.

Frequently Asked Questions

How long do I have to file a FINRA arbitration claim?

Under FINRA Rule 12206, a claim is not eligible for arbitration if six years have passed since the occurrence or event giving rise to it. The rule does not extend statutes of limitations, which can be shorter. Under the Texas Securities Act, claims based on untruths or omissions generally must be filed within three years after discovery and no more than five years after the sale (Government Code § 4008.062).

What types of conduct can I recover losses for?

Common claims include unauthorized trading, churning, recommendations that were unsuitable or not in the customer’s best interest, misrepresentation or omission of material facts, failure to diversify, breach of fiduciary duty where one existed, negligence, and failure to supervise. Losses caused only by market movements, without misconduct, generally are not recoverable.

Can I sue my broker in court instead of arbitration?

Usually not, if your account agreement has an arbitration clause, which most brokerage agreements do and courts generally enforce. FINRA arbitration is usually faster and less formal than court. In FINRA customer cases with three arbitrators, parties receive separate lists of public and non-public arbitrators, and each party may strike any or all of the non-public arbitrators, which allows a customer to seek an all-public panel (FINRA Rule 12403). If a claim is dismissed as too old under Rule 12206, it may still be pursued in court. Claims against an investment adviser that is not a FINRA member follow the advisory agreement’s dispute clause.

Sources

Disclaimer: This directory is provided for informational purposes only and does not constitute legal advice, endorsement, or recommendation of any attorney or law firm. Information about attorneys and law firms was compiled from publicly available sources and may not be current or accurate. We make no representations or warranties about the qualifications, experience, or quality of any attorney listed. Always verify attorney credentials with the State Bar of Texas, confirm current contact information, and conduct your own due diligence before hiring legal counsel. No attorney-client relationship is created by use of this directory.