Securities Attorneys: Protect Your Investments and Recover Your Losses

Securities fraud and broker misconduct claims follow a specific dispute-resolution track — arbitration before the Financial Industry Regulatory Authority (FINRA) — that operates under rules distinct from civil litigation. This page explains what securities attorneys handle, how the FINRA arbitration process works, and what investors should know about deadlines and recoverable damages before deciding whether to pursue a claim. At Varnavides Law, our securities attorneys represent investors who have lost money to securities fraud, unsuitable recommendations, and other broker misconduct.

Earlier in his career, attorney Gary Varnavides spent over a decade representing broker-dealers in FINRA arbitration and securities litigation. He now applies that understanding exclusively for investors. That background informs how the firm prepares cases — the documents defense firms typically rely on, the arguments they advance, and the procedural moves they make in FINRA arbitration.

What Do Securities Attorneys Do?

Securities attorneys are legal professionals who focus their practice on investment and securities law. We represent investors in disputes involving stockbrokers, financial advisors, brokerage firms, and investment companies. Our practice focuses on recovering losses caused by:

• Securities fraud and investment fraud
• Broker misconduct and negligence
• Violations of the FINRA Rule 2111 suitability obligation (which imposes three sub-obligations: reasonable-basis, customer-specific, and quantitative suitability) and Securities and Exchange Commission (SEC) anti-fraud regulations, including Rule 10b-5, 17 C.F.R. § 240.10b-5, and Regulation Best Interest, 17 C.F.R. § 240.15l-1, which requires a broker to act in a retail customer’s best interest
• Breach of fiduciary duty
• Misrepresentation and omission of material facts

Unlike general practice attorneys, securities lawyers understand the complex regulatory framework governing the investment industry. We know how to investigate claims, analyze trading records, calculate damages, and present compelling cases before FINRA arbitration panels.

Why You Need an Experienced Securities Attorney

The securities industry has its own rules, regulations, and dispute resolution system. Brokerage firms employ sophisticated legal teams and have vast resources to defend claims. Going up against them without specialized legal representation puts you at a significant disadvantage.

Common Cases Our Securities Attorneys Handle

Our firm represents investors in a wide range of securities disputes. The most common types of cases we handle include:

Churning and Excessive Trading

Churning occurs when a broker executes excessive trades in your account primarily to generate commissions rather than to benefit your investment goals. Excessive, quantitatively unsuitable trading is addressed by the quantitative-suitability component of FINRA Rule 2111 (which has three components: reasonable-basis, customer-specific, and quantitative suitability), and excessive trading also implicates FINRA Rule 2010, which requires that a member, in the conduct of its business, shall observe high standards of commercial honor and just and equitable principles of trade. According to FINRA’s 2024 dispute resolution statistics, excessive-trading and suitability claims remain among the top allegations in investor arbitration cases.

Unauthorized Trading

Unless you have given your broker written discretionary authority, every trade in your account requires your prior approval. Unauthorized trading occurs when a broker buys or sells securities without your knowledge or consent. Even profitable unauthorized trades violate securities regulations and your account agreement.

Unsuitable Investment Recommendations

Brokers must recommend investments that align with your financial situation, investment objectives, and risk tolerance. When a broker recommends high-risk investments to a conservative investor or concentrates a retiree’s portfolio in speculative securities, they may be liable for resulting losses.

Breach of Fiduciary Duty

Not every financial professional owes you a fiduciary duty, and the standard depends on who is advising you. Registered investment advisers owe a fiduciary duty under the Investment Advisers Act of 1940, 15 U.S.C. §§ 80b-1 et seq. Broker-dealers are generally not fiduciaries; under the SEC’s Regulation Best Interest, 17 C.F.R. § 240.15l-1 (compliance required as of June 30, 2020), a broker-dealer making a recommendation to a retail customer must act in that customer’s best interest and may not place its own financial or other interest ahead of the customer’s. Regulation Best Interest imposes four obligations — Disclosure, Care, Conflict of Interest, and Compliance — and its Care Obligation governs the suitability and excessive-trading analysis for broker-dealer recommendations to retail customers. Many states, including California, also impose common-law fiduciary or quasi-fiduciary obligations on brokers in particular circumstances. According to FINRA’s 2024 dispute resolution statistics, breach of fiduciary duty was the most frequently alleged controversy type in 2024 customer arbitrations, appearing in 1,252 cases.

Misrepresentation and Omission

Securities fraud often involves misrepresenting the risks, returns, or characteristics of an investment, or failing to disclose material information that would have affected your decision. These cases typically fall under 15 U.S.C. § 78j(b) of the Securities Exchange Act of 1934, and the SEC’s implementing rule, Rule 10b-5, 17 C.F.R. § 240.10b-5, which prohibits (a) any device, scheme, or artifice to defraud, (b) any untrue statement or omission of a material fact, and (c) any act or course of business that operates as a fraud or deceit, each in connection with the purchase or sale of a security. The material-misstatement-or-omission prong is the one most frequently invoked in investor-fraud claims.

The FINRA Arbitration Process

Most investment disputes are resolved through FINRA arbitration rather than court litigation. This is because nearly all brokerage account agreements contain mandatory arbitration clauses. Here is how the process works:

According to FINRA’s 2024 dispute resolution statistics, the overall average turnaround time in 2024 was 12.5 months from filing to closure across all case types. FINRA mediation reached a settlement in 87% of the mediation cases closed in 2024 (469 of 499).

Defense-Side Background: What It Means for Case Preparation

Earlier in his career, the firm’s founder represented broker-dealers and brokerage firms in FINRA arbitration before turning to investor representation. That prior-career experience informs how the firm prepares cases now.

• Anticipating defense arguments: Because the firm’s founder made those arguments earlier in his career defending the industry, the firm prepares for the procedural and substantive positions defense counsel commonly advance.
• Industry knowledge: Familiarity with brokerage operations, supervisory and compliance procedures, and the documents firms generate and rely on.
• Arbitration preparation: Experience with how FINRA arbitration panels weigh evidence and with the document production exchanged under FINRA Rule 12506 and the FINRA Discovery Guide’s Document Production Lists 1 and 2.

This background informs how the firm builds, documents, and presents investor claims; it is not a guarantee of any particular result.

Gary Varnavides: Credentials and Experience

Attorney Gary Varnavides brings a distinguished background to every case:

• 10 years at Sichenzia Ross Ference LLP earlier in his career, representing broker-dealers in FINRA arbitration and securities litigation (a prior practice; the firm now represents investors exclusively)
• New York Super Lawyers Rising Stars (2015-2023), a recognition given to Gary individually, reflecting the top 2.5% of attorneys in the New York Metro area
• Licensed in California and New York, with a FINRA arbitration practice that serves investors nationwide because FINRA arbitration is not bound by state bar lines
• Founder of Varnavides Law, PC dedicated exclusively to investor representation

Gary made the decision to switch sides because he believed investors deserved strong, knowledgeable advocates who truly understand the securities industry from the inside out. You can read more about his background on the firm’s attorney profile.

Time Limits: Two Separate Clocks

Securities claims are subject to strict deadlines, and it is important to understand that two distinct rules can apply — an arbitration eligibility rule and a court statute of limitations. They are not the same thing, and missing either can permanently bar recovery no matter how strong your case is.

Because the FINRA Rule 12206 six-year eligibility period and the court statute of limitations run independently, a claim can remain eligible for arbitration while a court lawsuit is already time-barred, or the reverse. The 28 U.S.C. § 1658(b) federal limitations period and the Cal. Corp. Code § 25506 state limitations period each impose their own deadline, and the interaction is fact-specific, so we evaluate every applicable deadline against your specific timeline. Primary sources: FINRA Rule 12206 (six-year eligibility); 28 U.S.C. § 1658(b) (2-year / 5-year limitations and repose); Cal. Corp. Code § 25506 (5-year / 2-year limitations period).

What Damages Can You Recover?

If your claim is successful, you may be entitled to recover:

Punitive damages and fee-shifting are not automatic and are not available in every case — they depend on the governing substantive law and the facts. The specific damages available depend on your case facts, the type of misconduct, and applicable state and federal law. Our securities attorneys conduct a thorough damage analysis and pursue the categories of recovery the law actually supports in your matter.

How We Handle Fees

We handle most securities cases on a contingency fee basis. This means:

• No upfront attorney fees: there are no hourly attorney bills to begin your case
• Attorney fees are contingent on recovery: we are paid an attorney fee only if we recover money for you, which aligns our interests with yours
• Fee percentage discussed during your consultation: we explain the contingency fee arrangement in detail before you engage us

You remain responsible for case costs, which may include filing fees, expert witnesses, and document production expenses. We discuss all potential costs during your free consultation so the arrangement is clear from the outset.

Serving Investors in California and Nationwide

Based in Los Angeles, our firm represents investors throughout California and across the United States. FINRA arbitration can be conducted in any location, and we regularly handle cases involving:

• Major national brokerage firms
• Regional broker-dealers
• Independent financial advisors
• Registered investment advisers
• Wire houses and clearing firms

Whether you are in Los Angeles, San Francisco, San Diego, or anywhere in California, our securities attorneys can evaluate your case and discuss your options during a free consultation.

Frequently Asked Questions

Conclusion: What This Means and How to Act

An investor evaluating a securities claim is really weighing four things at once: whether the conduct fits a recognized theory (unsuitable recommendations, churning, unauthorized trading, misrepresentation, or breach of fiduciary duty), which standard applies (the FINRA Rule 2111 suitability obligation’s three sub-obligations and the Regulation Best Interest Care Obligation under 17 C.F.R. § 240.15l-1 for broker-dealers, versus the Investment Advisers Act fiduciary duty for registered investment advisers), what can be recovered (compensatory damages, with interest, fee-shifting, and punitive damages only where the governing law and facts support them), and how much time remains. That last point carries two independent clocks — the FINRA Rule 12206 six-year arbitration-eligibility window and a separate court statute of limitations — either of which can bar recovery if missed. Because those deadlines run independently and the typical FINRA arbitration takes roughly a year from filing, the practical takeaway is to evaluate the claim early rather than assume time remains.

If you have suffered investment losses due to broker misconduct, securities fraud, or negligent financial advice, time matters. As of 2026, both the FINRA arbitration-eligibility window and any applicable court limitations period may already be running, and evidence becomes harder to preserve as time passes, so acting promptly helps protect your rights.