FAQs

REGISTRATION

  • Can I request a Central Registration Depository (CRD) report on my broker/dealer or sales agent?

Yes, please contact the Financial Industry Regulatory Authority called FINRA

You can also use FINRA BrokerCheck to learn important information about your broker or a broker you are considering working with.  BrokerCheck is a free tool. 

 

COMPLAINTS

  • What is the procedure for making a complaint regarding securities fraud with the Attorney General’s Office?

For information on how to file a Complaint, please click HERE.

  • What can be expected after a complaint has been made?

After your complaint has been received by the Investor Protection Bureau, it will be reviewed and assigned to an Attorney or an appropriate representative to investigate your complaint. If it is determined that your complaint should be handled by a different Bureau or agency, the securities bureau will forward your complaint to the appropriate office and you will be informed of the decision.

Please note that the Bureau cannot represent individuals in private matters; instead we investigate and prosecute fraud on behalf of the public at large where we suspect a pattern of fraud affecting many investors.

  • How can I check to see if a broker or an issuer has a license to do business in New York State? How can I review their background?

You may get basic information over the phone by calling the Securities Bureau’s Record Department. The staff can only give basic answers, such as a salesperson’s employment history, exams/series taken and yes/no answers to confirm any disciplinary history.

Under the State Freedom of Information Law, most files maintained by this Bureau are available for your review. You may also obtain copies of information contained in our files. The first five copies are free with a fee of twenty-five cents ($0.25) per page thereafter.

If you are requesting a printout of any record maintained in the securities bureau, such as a disciplinary history, a CRD report or to inquire about complaints against a company or an individual you plan to do business, please write to this office. Address your request to Investor Protection and Securities Bureau Chief, NYS Department of Law Office of the Attorney General, Investor Protection and Securities Bureau, 120 Broadway, 23 floor, New York, NY 10271. You may also fax your request to this office. Our fax number is (212) 416-8816.

Please note, all records or some portions of records maintained by this Bureau may not be disclosed. If the information you are requesting is confidential, involves a pending investigaion, or if it is an unwarranted invasion of personal privacy, your request may be denied

CORPORATIONS

  • Does the Bureau provide information on the value of old stocks or if the company still exists?

No, please contact the New York State Secretary of State.

PYRAMID SCHEMES

  • What are the differences between a legitimate multi-level marketing company and a pyramid scheme?

A legitimate multi-level marketing company emphasizes reliable products or services. A pyramid scheme uses products or services to disguise its quest for collecting money from the investors on the bottom levels to pay other investors further up the pyramid.

In a typical pyramid scheme, new investors must pay a fee for the right to sell the products or services as well as for the right to recruit others into the pyramid for rewards unrelated to products sales or services. Very often the products or services the victim must buy are unsalable, and the pyramid’s promoters refuse to repurchase them. On the other hand, legitimate multi-level marketing companies will buy back unsold merchandise, although often at a discount from the original price.

Success in multi-level marketing is based on two factors: product and service quality, and the hard work involved in being able to sell the products or services. Recruitment of new investors is secondary.

ARBITRATION AND MEDIATION OF DISPUTES

Most customer agreements with a securities broker/dealer include an "arbitration clause" that requires arbitration if you have a dispute over your rights or liabilities under the agreement. Even if securities laws have been violated, this provision will almost always prevent you from filing a lawsuit. Instead, you will be required to take your complaint to binding arbitration. There is no requirement that an investor must sign an agreement that requires arbitration of disputes; if you don't, however, you will find it almost impossible to find a broker/dealer who will do business with you. You may ask that the arbitration requirement be removed from the agreement. In the event of a dispute, however, arbitration may be faster and less expensive than the courts.

  • What Is Arbitration?

Arbitration is a process of dispute resolution in which a neutral third person -- the arbitrator -- makes a decision after a hearing at which both parties have an opportunity to present their case. The FINRA offers the largest arbitration forum in the securities industry, but several other arbitration forums are available to investors. Arbitration is not part of the court system, and can be a quicker and a less expensive alternative to filing a lawsuit. Because arbitration is binding and is subject to review by a court on a very limited basis, an investor should seek legal advice before agreeing to arbitration.

Arbitration Forums

FINANCIAL INDUSTRY REGULATORY AUTHORITY (FINRA)
1735 K Street, NW
Washington, DC 20006
(202) 858-4400
(800) 289-9999

FINRA Dispute Resolution
165 Broadway, 27th Fl.
One Liberty Plaza
New York, NY 10006
(212) 858-4000

NEW YORK STOCK EXCHANGE (NYSE)
11 Wall Street #7
New York, NY 10005
(212) 656-3000

AMERICAN ARBITRATION ASSOCIATION (AAA)
1633 Broadway, 10th Fl.
New York, NY 10019
(212) 484-4000

AMERICAN STOCK EXCHANGE (AMEX)
86 Trinity Place
New York, NY 10006
(212) 306-1000

 

  • What is Mediation?

Mediation is an informal alternative to arbitration. In the mediation process, a neutral third person -- the mediator -- helps disputing parties reach an agreement. Unlike an arbitrator, the mediator has no power to impose a decision on the parties

The FINRA offers investors the option of voluntary mediation to settle disputes with firms or brokers. While a typical arbitration case can take nearly a year, many mediation cases result in settlements within weeks, according to the FINRA.

The Arbitration Process

The arbitration process begins when you file a claim and pay a filing fee with an arbitration service.

Legal Representation

There are few formal rules governing either procedure or evidence at an arbitration hearing. Both sides present evidence and the hearing seldom lasts more than a day or two. Do not be misled into thinking arbitration is informal, like small claims court. Brokerage firms will always be represented by attorneys at arbitration hearings. While it is not required, you should consider using an attorney, as well.

About the Arbitrator

A single arbitrator or a panel of three arbiters may hear cases. The size of the panel depends upon the dollar amount of the claim. During the proceeding, the arbitrator will hold a hearing, listen to oral testimony, review the evidence, and render a decision.

How are cases settled?

Arbitration hearings can be held at almost any location convenient to the parties. Arbitrators usually are required to make a decision in 30 business days.

Arbitrators are not required to provide reasons for their decisions. Therefore, an investor can lose a decision with little or no explanation as to why, and be unable to appeal to the court system for relief.

The arbitration procedure is final and binding, with very limited review. For these reasons, an investor should consult with legal counsel before arbitrating a dispute.

Regulatory and Self-Regulatory Organizations
 
The American Stock Exchange (AMEX)                                      
Regulation Department
86 Trinity Place
New York, NY
212-306-1000
www.amex.com

The Regulation Department of the American Stock Exchange handles enforcement of Exchange rules and investigates customer complaints.
 
The Commodities Futures Trading Commission (CFTC)          
3 Lafayette Center
1155 21st Street, NW.
Washington, DC 20581
202-418-5000 (Information)
202-418-5320 (Division of Enforcement)
202-418-5514  (TTY)
www.cftc.gov

The CFTC is an independent agency that regulates commodity futures and option markets in the United States.   

The Federal Trade Commission (FTC)                                         
1 Bowling Green, Suite 318
New York, NY 10004-1415
877-382-4357 (Information) toll-free
www.ftc.gov

The FTC seeks to ensure that the markets function competitively by eliminating unfair or deceptive business acts and practices.
 
The Financial Industry Regulatory Authority (FINRA)                         
9509 Keywest Avenue
Rockville, MD  20850
301-590-6500
www.finra.org

NASD Regulation, Inc. and NYSE Arbitration now known as FINRA is responsible for regulating the securities industry and conducting arbitration matters.  CRD Information can be requested from this agency.
 

The National Futures Association (NFA)                                      
300 S. Riverside Plaza, #1800
Chicago, IL 60606-6615
312-781-1300
800-621-3570
www.nfa.futures.org

The NFA is the agency which regulates the futures industry in the United States.

The North American Securities Administrators Association (NASAA)
750 First Street, NE, Suite 1140
Washington, DC 20002
202-737-0900
www.nasaa.org

The NASAA is a nonprofit organization that provides educational materials for potential investors regarding common investment scams.  It also seeks to help those who believe that they may have fallen victim to such fraud.

The United States Securities and Exchange Commission (SEC)
SEC Headquarters
100 F Street, NE
Washington, DC  20549
(202) 942-8088
800-SEC-0330(Information Service)
888-SEC-6585 (General SEC Information)
www.sec.gov

The SEC is an independent regulatory agency with the responsibility for administering the federal securities laws. It also provides a list of investor alerts to protect securities investors.

New York State Department of Financial Services                      
Banking Department/Insurance Department
One State Street
New York, NY  10004-1511
800-342-3736
212-480-6400
518-474-6600
www.dfs.ny.gov

The DFS was created by transferring the functions of the New York State Banking Department and the New York State Insurance Department into a new department.  The transfer of these functions became official on October 3, 2011.