Investor Resource
Can I Sue My Stockbroker?
Most investor claims against brokers go through FINRA arbitration, not court. Learn when you have a valid claim and how the process works.
You Probably Can't Sue — But You Can Arbitrate
When you opened your brokerage account, you almost certainly signed a pre-dispute arbitration agreement. That clause requires you to bring any claims against your broker through FINRA arbitration rather than a court of law. This is standard across the industry — Merrill Lynch, Morgan Stanley, Fidelity, Schwab, and virtually every other major brokerage firm includes it. The good news: FINRA arbitration is a legitimate, enforceable process that has returned billions of dollars to defrauded investors. It is generally faster and less expensive than litigation.
When Do You Have a Valid Claim?
Not every investment loss is actionable. Markets go up and down, and brokers are not guarantors of returns. However, you likely have a valid claim if your broker recommended investments that were unsuitable for your age, income, or risk tolerance; executed trades without your authorization; churned your account to generate commissions; misrepresented or omitted material facts about an investment; or invested your money in a way that violated your stated investment objectives. The key question is whether the broker breached a legal duty — not whether you lost money.
The Statute of Limitations
Time matters. FINRA rules require that claims be filed within six years of the event giving rise to the dispute. State securities laws often have shorter deadlines — sometimes as little as two years from the date you discovered (or should have discovered) the wrongdoing. If you suspect misconduct, do not wait. Consult a securities attorney as soon as possible to preserve your rights. The attorneys in our directory offer free consultations and can quickly assess whether your claim has merit.
Frequently Asked Questions
Can I sue my broker in regular court?
In most cases, no. Your account agreement almost certainly contains a mandatory arbitration clause that requires you to bring claims through FINRA arbitration. There are limited exceptions — class actions, for example — but the vast majority of investor claims are resolved through arbitration.
How much does it cost to bring a FINRA arbitration claim?
Filing fees vary based on the amount of the claim, ranging from $50 for claims under $1,000 to $1,800 for claims over $500,000. Most securities attorneys handle these cases on a contingency fee basis — meaning you pay nothing unless you recover. Attorney fees typically range from 25% to 40% of the recovery.
How long does FINRA arbitration take?
The average FINRA arbitration case takes 12 to 18 months from filing to award. Simpler cases on the simplified track (claims under $50,000) can be resolved in as little as 6 months. Complex cases with multiple parties can take longer.
Attorneys Who Handle These Cases
These attorneys have experience with can i sue my stockbroker? matters.