When investment fraud, broker misconduct, or securities violations cost you money, a securities litigation lawyer can help you fight back. At Varnavides Law, we represent investors who have suffered financial losses due to wrongdoing by brokers, financial advisors, and investment firms. Our founder, Gary Varnavides, spent a decade on the broker-dealer defense side before switching to represent investors — giving our clients firsthand insight into how the other side builds its case.
This page explains what securities litigation involves, when you need a securities litigation attorney, and how our insider experience defending the securities industry helps us build stronger cases for our clients.
Key Takeaways
- Securities litigation encompasses disputes involving stocks, bonds, mutual funds, and other financial instruments
- FINRA reports that 84% of customer arbitration cases closed through settlement or paid damages in 2024, and mediation resulted in settlement 89% of the time
- The SEC brought 583 enforcement actions in fiscal year 2024, according to the SEC’s Annual Report to Congress
- Gary Varnavides brings a decade of defense-side experience, giving our clients insight into how broker-dealers will respond to claims
- We handle cases in California and New York, with national reach through FINRA arbitration — average case duration is 11.8 months per 2024 FINRA data
What Is Securities Litigation?
Securities litigation refers to legal disputes involving financial instruments such as stocks, bonds, mutual funds, options, and other investment products. These cases typically arise when investors suffer losses due to fraud, misrepresentation, negligence, or violations of securities laws and regulations.
Unlike general commercial litigation, securities litigation requires specialized knowledge of complex financial products, federal and state securities laws, regulatory frameworks like the SEC and FINRA, and the operational practices of broker-dealers and investment advisors.
Securities Litigation vs. Securities Arbitration: Most disputes between investors and their brokers are resolved through FINRA arbitration rather than court litigation. However, cases involving publicly traded companies or parties not subject to FINRA jurisdiction proceed through federal or state courts.
Why You Need a Securities Litigation Lawyer
Securities cases are fundamentally different from other types of legal disputes. A securities litigation attorney brings specialized skills that general practice lawyers simply do not have:
Technical Financial Knowledge
Securities cases involve complex products like derivatives, structured products, and alternative investments. Your lawyer must understand how these products work to prove they were unsuitable or misrepresented.
Regulatory Expertise
Cases often hinge on violations of specific regulations. SEC Rule 10b-5 (17 C.F.R. § 240.10b-5) prohibits fraud and misrepresentation in connection with securities transactions. FINRA Rule 2111 governs suitability. FINRA Rule 2010 requires members to observe high standards of commercial honor and just and equitable principles of trade. A securities litigation lawyer knows which rules apply.
FINRA Arbitration Proficiency
Most broker-customer disputes must go through FINRA arbitration. This process differs significantly from court litigation and requires specific procedural knowledge and defense-side experience.
Types of Securities Litigation Cases We Handle
Our securities litigation practice covers a broad spectrum of investor disputes and securities fraud cases. We represent investors in the following types of matters:
Securities Fraud Claims
Securities fraud occurs when investors are deceived about material facts related to an investment. Common forms include misrepresentation of investment risks, omission of material information, Ponzi schemes, and fraudulent inducement to invest. Under federal securities laws, fraud victims may be entitled to recover their investment losses plus interest. Learn more about how we handle investment fraud cases.
Broker Misconduct
Brokers and financial advisors owe duties to their clients. When they breach these duties, investors suffer. We handle cases involving:
- Churning: Excessive trading to generate commissions
- Unsuitable recommendations: Investments inappropriate for the client’s risk tolerance or financial situation
- Unauthorized trading: Making trades without client approval
- Failure to supervise: When firms fail to monitor their brokers’ misconduct
- Misrepresentation: Providing false or misleading information about investments
Breach of Fiduciary Duty
Investment advisors registered with the SEC owe a fiduciary duty to act in their clients’ best interests. When advisors prioritize their own interests over their clients’ interests, they may be liable for resulting losses. Fiduciary duty claims often involve self-dealing, conflicts of interest, or recommending investments that benefit the advisor rather than the client.
Market Manipulation
Market manipulation involves artificial inflation or deflation of securities prices through deceptive practices. Common schemes include pump-and-dump operations, spoofing, layering, and wash trading. Victims of market manipulation may recover losses through securities litigation.
Investment Advisor Disputes
Registered investment advisors (RIAs) owe a continuous fiduciary duty to clients — a qualitatively different obligation from the point-in-time best-interest standard that Regulation Best Interest (Reg BI, 17 C.F.R. § 240.15l-1) imposes on broker-dealers, which requires acting in a customer’s best interest at the time of a recommendation but does not impose an ongoing advisory duty. We represent clients in disputes involving fee disputes, portfolio mismanagement, failure to follow investment mandates, and conflicts of interest.
| Case Type | Common Claims | Typical Forum |
|---|---|---|
| Broker Misconduct | Churning, unsuitable recommendations, unauthorized trading | FINRA Arbitration |
| Investment Advisor Disputes | Breach of fiduciary duty, mismanagement | Court or AAA Arbitration |
| Securities Fraud (Individual) | Fraud, misrepresentation, Ponzi schemes | Federal Court (Exchange Act claims under 15 U.S.C. § 78aa); State Court for state-law fraud theories |
The Varnavides Law Advantage: Defense Experience on Your Side
What sets our securities litigation practice apart is Gary Varnavides’ prior experience defending broker-dealers and financial institutions at Sichenzia Ross Ference LLP, a prominent Wall Street defense firm. This defense-side perspective provides our clients with critical advantages:
We Know the Defense Playbook: Having spent a decade defending broker-dealers against investor claims, Gary knows exactly how the other side will respond. We anticipate defenses, identify weaknesses in their positions, and prepare our cases accordingly.
Anticipate Defenses
We know the standard defenses broker-dealers use: customer authorization, sophisticated investor, market conditions. We prepare to counter them from day one.
Identify Key Evidence
Defense experience taught us where firms keep records, what documents matter, and how to obtain evidence that proves misconduct.
Evaluate Settlement Value
We understand how firms evaluate cases internally, what they consider high-risk, and when they are likely to settle. This helps us negotiate from a position of knowledge.
The Securities Litigation Process
Understanding what to expect helps clients make informed decisions about pursuing their claims. Here is an overview of the typical securities litigation process:
Step 1: Case Evaluation
We review your account statements, correspondence with your broker, trade confirmations, and other documentation to assess whether you have a viable claim. This initial consultation is free, and there is no obligation to proceed.
Step 2: Claim Filing
Depending on your situation, we file either a FINRA arbitration claim (for disputes with broker-dealers) or a lawsuit in the appropriate court. The filing includes a detailed statement of claim outlining the misconduct and damages.
Step 3: Discovery
Both parties exchange relevant documents and information. We obtain account records, emails, supervisory files, compliance records, and other evidence to support your claims.
Step 4: Resolution
Cases resolve through settlement negotiation, mediation, or a hearing before FINRA arbitrators or a judge. According to FINRA Dispute Resolution Statistics, 89% of mediated cases reached settlement in 2024, and the average case duration was 11.8 months.
FINRA Arbitration: How Most Investor Claims Are Resolved
When you open a brokerage account, you typically sign an agreement requiring disputes to be resolved through FINRA arbitration rather than court litigation. Under FINRA Rule 12200, member firms and their associated persons are required to arbitrate disputes with customers either pursuant to a predispute arbitration agreement or when a customer requests arbitration. Understanding this process is essential for anyone pursuing a securities claim.
FINRA arbitration operates similarly to a trial but with some key differences:
Arbitration Advantages
- Faster resolution (average 11.8 months per 2024 FINRA data)
- Lower costs than federal court
- Industry-experienced arbitrators
- Less formal procedures
- Limited grounds for appeal protect a favorable award from being overturned
Key Considerations
- Limited discovery compared to court
- No jury trial
- Arbitrators not required to follow precedent
- Awards generally cannot be appealed
- Public disclosure of broker misconduct
Securities Litigation Statistics: 2024
Understanding current trends in securities litigation helps set realistic expectations for your case. The following data, current as of 2026, comes from FINRA Dispute Resolution Statistics and other authoritative sources.
| Metric | 2024 Data | Source |
|---|---|---|
| SEC Enforcement Actions | 583 actions in FY 2024 | SEC Annual Report to Congress |
| FINRA Mediation Settlement Rate | 89% | FINRA Dispute Resolution Statistics (2024) |
| FINRA Customer Case Closure Rate | 84% settled or paid | FINRA Dispute Resolution Statistics (2024) |
| Average FINRA Case Duration | 11.8 months | FINRA Dispute Resolution Statistics (2024) |
Time Limits for Securities Claims
Time limits apply to all securities claims. Acting promptly is essential to protect your rights.
- Federal securities fraud: 28 U.S.C. § 1658(b) sets the limitations period for private securities-fraud claims involving scienter: 2 years from discovery of the facts constituting the violation, or 5 years from the date of the violation itself — whichever is earlier
- FINRA arbitration claims: Under FINRA Rule 12206, FINRA will not accept a claim for arbitration filed more than six years after the occurrence or event giving rise to the claim. This is a forum-eligibility rule — not a statute of limitations — meaning claims filed beyond six years may be dismissed for lack of forum eligibility regardless of state law limitations periods
- California state securities claims: Varies by claim type; often two to four years
Do Not Delay: Time limits begin running from when you knew or should have known about the misconduct. Waiting too long can result in losing your right to recover. Contact a securities litigation lawyer promptly to preserve your claims.
What Damages Can You Recover?
Depending on your case, you may be entitled to recover:
Compensatory Damages
- Investment losses and market-adjusted losses
- Lost profits or interest
- Out-of-pocket expenses
Additional Recovery (Where Applicable)
- Attorney fees (available in some cases)
- Punitive damages (for egregious or willful conduct)
- Pre-judgment interest
- Expert witness costs
Why Choose Varnavides Law for Your Securities Litigation Case
Selecting the right securities litigation lawyer is critical to your case outcome. Here is what distinguishes our approach:
Defense-Side Experience
Gary spent a decade on the broker-dealer defense side before founding Varnavides Law. That insider background means he knows how brokerage firms think, what defenses they will raise, and where their arguments are weakest.
Recognized Excellence
Gary has been recognized as a New York Super Lawyers Rising Star from 2015 to 2023, an honor reserved for the top 2.5% of attorneys in the New York metropolitan area — awarded to Gary individually.
Client-Focused Approach
We work on contingency in most cases, meaning you pay no attorney fees if we do not obtain a recovery for you. We also provide free initial consultations to evaluate your case. Our Los Angeles office serves investors in California, New York, and nationwide through FINRA arbitration.
Frequently Asked Questions About Securities Litigation
What is the difference between a securities litigation lawyer and a general business attorney?
A securities litigation lawyer focuses on disputes involving stocks, bonds, and other investment products. This requires deep knowledge of SEC and FINRA regulations — including FINRA Rule 2111 (suitability obligations) and the ethical standards embedded in FINRA Rule 2010 — fiduciary duties, and the operations of broker-dealers. General business attorneys may lack the technical financial knowledge and regulatory expertise needed for securities cases.
How long do securities litigation cases typically take?
FINRA arbitration cases average 11.8 months from filing to resolution, according to 2024 FINRA Dispute Resolution Statistics. Cases settled through mediation often resolve faster. Federal court securities litigation can take two to four years or longer.
What does it cost to hire a securities litigation attorney?
We handle most securities litigation cases on a contingency fee basis, meaning you pay no attorney fees if we do not obtain a recovery for you. The specific fee arrangement is discussed during your free initial consultation. You remain responsible for case costs separate from attorney fees.
Can I sue my broker if I signed an arbitration agreement?
Most brokerage account agreements contain mandatory arbitration clauses requiring disputes to be resolved through FINRA arbitration rather than court. FINRA Rule 12200 obligates member firms and associated persons to arbitrate customer disputes when requested. Arbitration is a legitimate forum for resolving claims, and FINRA arbitrators have authority similar to judges. We regularly pursue claims through FINRA arbitration on behalf of investors.
What evidence do I need for a securities fraud case?
Important evidence includes account statements, trade confirmations, correspondence with your broker, marketing materials, and any written investment recommendations. We can help you gather additional evidence through discovery, including broker emails, supervisory records, and compliance files.
Do you handle cases outside of California?
Yes. Our firm is based in Los Angeles and licensed to practice in both California and New York. Additionally, FINRA arbitration is available nationwide — we represent investors from across the country in their claims against broker-dealers and financial advisors.
What is the time limit for my securities claim?
Under FINRA Rule 12206, FINRA will not accept an arbitration claim filed more than six years after the occurrence or event giving rise to the claim. This is a forum-eligibility rule, not a statute of limitations. Federal securities fraud claims have a two-year period from discovery, with a five-year outside limit. State law claims vary. Contact us promptly to ensure your claims are timely.
How do I know if I have a valid securities litigation case?
Schedule a free consultation to review your situation. We will examine your account statements and trading history, assess whether your broker’s conduct violated applicable rules, and determine whether you have recoverable damages. There is no cost or obligation for this initial evaluation.
Contact Our Securities Litigation Practice
If you have suffered investment losses due to broker misconduct, fraud, or securities law violations, we can help. Our securities litigation lawyer will evaluate your case and explain your options at no charge.
Schedule Your Free Consultation
Get a confidential case evaluation from a securities litigation lawyer with insider knowledge of how broker-dealers defend against investor claims. No attorney fees unless we recover money for you.