Broker-Dealer Disputes

Areas of Emphasis

  • SRO Arbitration Proceedings
  • SEC Enforcement Actions
  • SRO Disciplinary Proceedings

Practice Overview

Members of Reed Smith’s Securities Litigation and Enforcement Group have broad experience in meeting the special litigation and regulatory needs of firms and individuals who register with the Securities and Exchange Commission as broker-dealers under Section 15 of the Exchange Act of 1934.  Our attorneys have previous experience working at the NYSE, FINRA and the SEC’s Divisions of Enforcement, Market Regulation, and Corporate Finance.  Our clients include full-service brokerage houses, specialist organizations, proprietary trading firms, electronic access brokers and individual market makers.

We have represented broker-dealer clients in administrative proceedings, enforcement investigations and disciplinary hearings before the nation’s registered securities exchanges and the FINRA.  We have also litigated member-to-member and customer-to-member disputes before arbitration panels of the FINRA, the New York Stock Exchange, the Chicago Board Options Exchange, Chicago Mercantile Exchange and American Arbitration Association.  The Group is highly skilled in its representation of market maker and specialist organizations that trade standardized options and other derivative instruments.  Our experience includes all manner of broker-customer litigation involving, among others, claims of fraud, unsuitability, unauthorized trading, churning, failure to execute, sales practice violations, control person liability and “selling away.” 

We have represented our clients in state disciplinary proceedings, defending claims of market and stock manipulation, failure to supervise, money laundering, excessive underwriter’s compensation, fraudulent off-shore offerings, unregistered investment advisers and floor broker front running.  We also have assisted broker-dealer clients in responding to deficiency letters issued by the SEC and NASD pursuant to routine and cause examinations. Additionally, we have successfully sought review of requests for reinstatement of statutorily disqualified persons and addressed issues arising from broker-dealer market-making and trading activities and trade reporting and recordkeeping.  Other issues we recently handled include net capital, FOCUS and other financial reporting issues, account transfer issues, and soft dollar and directed brokerage issues.

We have also handled many broker-related employment cases, addressing claims for corporate raiding, breach of various post-employment restraints, and misappropriation of trade secrets and confidential information.