Investor protection frequently asked questions

Investments, Registration & Regulation

File a complaint

Registration

Yes. Contact the Financial Industry Regulatory Authority (FINRA).

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

Complaints

After the Investor Protection Bureau (IPB) receives your complaint, it will review the matter and assign it to an attorney or other representative for investigation. If we determine that your complaint should be handled by a different bureau or agency, we will forward your complaint to the appropriate office and we will inform you.

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

You can get basic information over the phone by calling the IPB's record department. Our staff can only give basic answers about an individual, such as employment history, exams or series taken, and yes or no answers about disciplinary history.

Under the U.S. Department of State Freedom of Information Law, most files maintained by the bureau are available for your review. You can also obtain copies of information in our files. The first five copies are free. We charge a fee of 25 cents for each page after that.

If you are requesting a printout of any record maintained in the IPB, such as a disciplinary history or a CRD report, or if you want to inquire about complaints against a company or an individual, please write to us at:

Investor Protection Bureau
Office of the New York State Attorney General
28 Liberty Street 15th Floor
New York NY 10005

Or you can fax your request to us at 212-416-8816.

Please note: We may not be able to disclose all records or some portions of records we maintain. We may deny your request if the information you ask for:

  • is confidential
  • involves a pending investigation
  • is an unwarranted invasion of personal privacy

Corporations

No. Please contact the New York Secretary of State.

Pyramid schemes

A legitimate multilevel marketing company emphasizes reliable products or services. A pyramid scheme uses products or services to disguise its objective: to collect money from investors on the bottom levels to pay other investors further up the pyramid.

In a typical pyramid scheme, new investors must pay a fee to sell the products or services and to recruit others into the pyramid for rewards. Very often, the victim must buy products or services that are impossible to sell, and the pyramid’s promoters refuse to repurchase them. By contrast, legitimate multilevel marketing companies will buy back unsold merchandise, although often at a discount from the original price.

In legitimate multilevel marketing, success is based on two factors: the quality of the company's products and services, and the hard work required to to sell them. 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 your broker-dealer has violated securities laws, this provision will almost always prevent you from filing a lawsuit. Instead, you will be required to take your complaint to binding arbitration.

As an investor, you are not required to 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 can ask to remove the arbitration requirement from the agreement.

Keep in mind that, in the event of a dispute, arbitration may be faster and less expensive than the courts.

Arbitration is a process of dispute resolution between two parties. A neutral third party — the arbitrator — hears both parties present their case, then makes a decision. FINRA offers the largest arbitration forum in the securities industry, but several other arbitration forums are also available to you as an investor.

Arbitration is not part of the court system. It can be quicker and less expensive than filing a lawsuit. But, because arbitration is binding and is subject to review by a court on a very limited basis, ask an attorney for advice before you agree to arbitration.

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.

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 FINRA.

The arbitration process

Arbitration begins when you file a claim and pay a filing fee to 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. But do not make the mistake of thinking that arbitration is informal, like small claims court. Brokerage firms will always be represented by attorneys at arbitration hearings. While you are not required to use an attorney, we suggest that you consider hiring one.

About the arbitrator

Depending on the dollar amount of your claim, your case may be heard by a single arbitrator or a panel of three arbiters. Arbiters are more strictly bound by the rules of law and equity than are arbitrators, who have more latitude to use their discretion in judgments. During the proceeding, the arbitrator or panel 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. Consult with legal counsel before arbitrating a dispute.

Regulatory and self-regulatory organizations

American Stock Exchange (AMEX)

Regulation Department
86 Trinity Place
New York NY 10006
212-306-1000
https://www.amex.com

The Regulation Department of the American Stock Exchange handles enforcement of Exchange rules and investigates customer complaints.

Commodities Futures Trading Commission (CFTC)        

3 Lafayette Center
1155 21st Street NW
Washington DC 20581
Information: 202-418-5000
Enforcement: 202-418-5320
Hearing/voice impaired: 202-418-5514
https://www.cftc.gov

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

Federal Trade Commission (FTC)  

1 Bowling Green, Suite 318
New York NY 10004-1415
Information: 1-877-382-4357 
https://www.ftc.gov

FTC seeks to ensure that the markets function competitively by eliminating unfair or deceptive business acts and practices.

Financial Industry Regulatory Authority (FINRA)

9509 Key West Avenue
Rockville MD 20850
301-590-6500
https://www.finra.org

FINRA is responsible for regulating the securities industry and conducting arbitration matters. You can request CRD information from this agency. FINRA was formed in 2007 when the National Association of Securities Dealers (NASD) Regulation, Inc., merged with New York Stock Exchange (NYSE) Arbitration in 2007.

National Futures Association (NFA)

300 S. Riverside Plaza #1800
Chicago IL 60606-6615
312-781-1300
1-800-621-3570
https://www.nfa.futures.org

The NFA regulates the futures industry in the United States.

North American Securities Administrators Association (NASAA)

750 First Street NE Suite 1140
Washington DC 20002
202-737-0900
https://www.nasaa.org

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

United States Securities and Exchange Commission (SEC)
SEC Headquarters

100 F Street NE
Washington DC 20549
202-942-8088
1-800-732-0330 (Information Service)
1-888-732-6585 (General SEC Information)
https://www.sec.gov

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
1 State Street
New York NY 10004-1511
1-800-342-3736
212-480-6400
518-474-6600
https://www.dfs.ny.gov

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.