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out of the courtroom , or if your
opposition's gesture is a sign of
weakness. If he feels you have a solid
case , the final decision is up to you .
Think over the plus factors as well as
the minus ones .
The minus factors are fairly
apparent. You may not have the
time or the stamina for pursuing the
matter to the courtroom . Besides ,
Goliath may have a battery of the
best lawyers on Wall Street to
represent him . Your lawyer usually
won't even look at the case on a
contingency basis ; rather , his fees
and other expenses will probably be
sky-high if he's good. And , of
course , you may lose .
Then, on the plus side , you will
earn the satisfaction of following
through on something you genuinely
believe in . Perhaps in the jury will be
one or two jurors who have
accumulated a number of broker
grievances themselves. If fraud is
really involved, you stand to be
awarded treble punitive damages as
well as court costs . Besides , what can
beat the satisfaction of winning?
This is one type of case where it
pays to have the best legal repre-
sentation you can afford . There are a
number of legal pitfalls that a good
lawyer, with a proven track record of
securities litigation, can foresee and
overcome . The lawyer you're look-
ing for is probably a real maverick ,
with an anti-establishment style . It's
possible he also lives miles away from
you. It's worth it to track him down if
he's good ... and if you expect to win .
Find him by consulting your state bar
association's list of recommended
attorneys . Or investigate the publish-
ed reports of securities litigations at a
local law school library . Write down
the names of the lawyers who won
the most important decisions .
It's quite possible , of course -
almost inevitable - that if he's good ,
he'll cost plenty . If the fees are
prohibitive , you might try , as Richard
Ney suggests in The Wall Street
Gang, to enlist other stockholders
who have the same complaint. Ney
suggests advertising tor them , or
getting your lawyer to obtain (legally)
their names from the broker or
brokerage house in question . While a
shared complaint divides the total
legal fees , it may weaken your case
by adding muted shadings to the
proceedings . Consider your options
carefully .
Be sure to level with your lawyer,
once you've gotten him . Tell him
about any mistakes you might have
made : otherwise , the opposition may
use them against you . And , techni-
cally , if you withhold any information
favoring the brokerage house , they
could countersue!
How does this broker-investor
breach come about to begin with?
While the rule to the investor is
"investigate before you in vest ,"
investors still regard their brokers
with the confidence usually reserved
for their doctors and lawyers .
Unfortunately , too often this confi-
dence is misplaced.
Who's at fault here? In part , of
course, the brokerage business may
well be at fault. Since they earn the
greater part of their total compensa-
tion from the volume of business they
generate , commissions can often
lead greedy brokers away from their
client's investment objectives .
In their defense, brokers protest
they're caught in a "damned if we
do , damned if we don't" situation . If
a broker's advice is taken , an investor
who suffers a loss will scream "Why
did you advise me to take such a
course of action?" As a result , the
investor may ignore the broker's next
bit of advice , and the customer may
again end up with a loser . His
complaint , then , say the brokers is
"Why didn 't you convince me of
your advice?"
Transferring the blame to the
client , however , usually doesn't hold
water in court . Brokers are , after all ,
well-paid - not only for their transac-
tions but for their interactions with a
client. But , the best protection from
abuse a client can give himself is to
keep an eagle eye on his broker's
performance . Pick a broker with
whom you feel comfortable .
If you get stuck with a lemon ,
however , do something about it .
Here is a list of where to direct your
complaints :
National Association of Security
Dealers
1735 K St ., N.W .
Washington , DC 20006
American Stock Exchange
86 Trinity Place
New York , NY 10006
You may also find that public
documents can be valuable reference
sources . Here are a few places to find
them :
Public reference section
Office of Records and Service
~ :!curities & Exchange Commis-
sion
Washington , DC 20549
The National Investment Library
80 Wall St.
New York , NY 10005
Securities Report Service
Commerce Clearing House , Inc.
1120 Avenue of the Americas
New York , NY 10036
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