Download Brooklyn Law School Investor Rights CLinic

Investor Education Program
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Represent Investors
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Provide Investment Education (Not Advice)
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Provide investment education and inform you
of your rights as an investor
Provide information on how to educate
yourself
What actions to take if you believe something
has gone wrong with your investment
…IT IS YOUR MONEY!
…AND YOU HAVE RIGHTS!
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Introduction
Preparing to Invest
Meeting Your Broker
General Precautions
Risk v. Reward
Broker’s Duties to Clients
Ways to Address Broker Misconduct
Questions to Ask Yourself
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What are my investment objectives/goals?
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Retirement, education, house, income, etc.
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How much? When?
Questions to Ask Yourself
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What is my risk tolerance?
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How much are you willing to lose?
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How much can you afford to lose?
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How predictable (or stable) and sufficient is your
source of income?
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Write down your goals and questions.
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Brokercheck
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Broker must be registered with FINRA
How to check broker history with FINRA
 www.FINRA.org/brokercheck
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Be prepared to take notes
Make sure you fully understand the account
documents and any suggested investment
Read the Prospectus (if available)
Caution: Signing Documents
DO NOT BE AFRAID TO ASK QUESTIONS!!!
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REMEMBER: IT IS YOUR MONEY
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Business Cards
Your Notes
Any Correspondences
**Opening Account Documents**
Prospectus
Trade Confirmations
Monthly/Quarterly Statements
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Remember To Read Them!!!!!!
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Be careful of verbal promises and guarantees
of high returns
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Price appreciation vs. interest rates
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Brokers are allowed to “sell” the investment
Brokers are not allowed to promise/guarantee
a return
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ALWAYS DO YOUR OWN RESEARCH!
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Bank and broker may be in same building
Traditional bank accounts are guaranteed by
Federal Deposit Insurance Corporation(FDIC)
All investments in brokerage accounts are not
insured. They are subject to losses.
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Your Money Is Not Insured
Mutual funds, stocks, bonds, annuities, other
investment products.
 U.S. Treasury securities – bills, bonds and notes are
backed by U.S. government.
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Any investment in stocks involves a degree of
risk.
As a general rule, the higher potential for
reward, the greater the risk . . .
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Stock (NYSE, NASDAQ, OTC)
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What is the company’s performance over time?
 Google Finance
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Mutual Fund (ETFs, Equity Funds, Money
Market Funds, etc.)
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Fees
 “no load” or “low-load”
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“Basket of securities”
There are many other investment products!
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To deal fairly with customers
To know the customer
To make only suitable investment
recommendations
To disclose accurate and truthful information
To trade only in accordance with the
customers instructions
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Contact broker – may be a simple mistake
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Get the name of whom you spoke to
Always follow up a phone call with letter or email
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Contact broker’s supervisor
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Contact lawyer
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FINRA
City/State Bar Association
Law School Clinics
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SEC.gov
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FINRA.org
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INVESTOR.org
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Google.com/Finance
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fdic.gov/consumers/index.html