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Reviews


The authors have taken the rules and regulations of the brokerage industry and put them in laymen’s terms. -- Professor William C. Tyson, The Wharton School & The Law School of the University of Pennsylvania


The Book, Brokerage Fraud is a must read for all compliance professionals and brokerage firm's compliance and legal departments.

Complinet.com


This book is a timely wake up call to the brokerage industry to clean up its ways. -- George D. Mullen, Vice President UBS PaineWebber


Tracy Stoneman and Douglas Schulz certainly know what Wall Street brokerage firms wish you didn't. -- Evan Cooper, Editor-in-Chief, On Wall Street, Co-Author


This book can save you thousands of dollars and loads of headaches! -- Jordan E. Goodman, author of Everyone's Money Book


Had "Brokerage Fraud" been available to my wife and I eight years ago, it may very well have saved us the fortune we lost to a mercenary industry that promotes itself as caring and responsible, when in fact it cares mostly for itself.


"Brokerage Fraud" is frank and friendly, organized, comprehensive, easy to digest -- and quite unique, too, because the distinguished authors tell all about an autonomous, all-powerful institution that routinely sheers the uninitiated."


". . . I am an attorney and an investor. Yet, I must say that each chapter of 'Brokerage Fraud' brought new information and insight that is invaluable . ."


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U.S. SECURITIES 

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Icon for the SEC websiteTo protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

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Q. WHY USE A SECURITIES EXPERT WITNESS? 

 A. WHO ELSE CAN TESTIFY ABOUT BROKEN LAWS, REGULATIONS AND NORMS?  

The attorney gives the opening and closing argument, but that is not evidence. The client can testify about how he was wronged, but he has a financial interest to gain. The brokerage firm representatives can testify that they did things, "by the book" but they have assests to protect. The securities expert/witness is an unbiased person engaged to give an opinion based on experience, knowledge, and expertise. He provides independent, impartial, and unbiased evidence to the court or arbitration panel. - Douglas Schulz

WHY HIRE A SECURITIES EXPERT?

Expert witnesses are used throughout courts and arbitrations in the United States. An expert's job is to work for the defense or the claimant in assisting the fact finder (the arbitrators or, in court, the jurors) in understanding the issues upon which they must base their decision. You may or may not be familiar with the use of experts in the litigation arena. Securities arbitrations are unique in their use of expert witnesses. There is a famous quote that, "Securities experts are the gladiators of securities arbitration." This is because experts usually play a triple role in securities arbitrations - analyzing the investments at issue, determining what securities rules and regulations were violated, and calculating the investor's damages. Since some of the panel members may have no involvement in the securities industry, education by an expert on these three areas is paramount.

And since on February 1, 2011 the SEC approved FINRA's rule change to provide customers in all FINRA arbitrations the option of having an all public panel, the securities expert witness is even more critical.

However, there is a fourth function of securities experts. Ever since 1987, due to a United States Supreme Court ruling, investors have been required to arbitrate their claims, as opposed to taking them to court. Behind the private, closed-doors of arbitration, securities experts do more than assist the trier of fact with respect to the three areas mentioned above. They additionally serve as assistants to the lawyers in the case. Arbitration rules allow experts to stay in the hearing room throughout the arbitration. This is a major benefit, because in court, the expert is disallowed from being in the courtroom when other witnesses testify. There, though, the expert has the benefit of pre-trial fact finding procedures such as depositions, interrogatories, and other types of discovery. In a court case, lawyers are able to gather a large percentage of the testimony and facts prior to the trial or hearing. They then prepare their case with that information and funnel the information to their testifying expert.

Not so in arbitration where pre-trial discovery avenues are unavailable or severely limited. Although this is a tremendous cost saving for the client, it means that much of the "discovery" in the case actually occurs during the arbitration while the witnesses are testifying! The expert can play a critical role in assisting the lawyer in interpreting what can sometimes be complicated securities issues that arise during witness testimony. In addition, the expert can comment on the testimony of witnesses and form opinions based on what has transpired during the arbitration.

An arbitrator in a securities arbitration is a fairly unique individual, because he or she is both the judge and the jury. The arbitration process can far too often be somewhat unstructured and at its worst, a guessing game. Wherein in the courtroom, the rules and regulations as to testimony and documents is extremely regulated, in arbitration, the rules are less formal and left up to the discretion of the arbitration panel. Therefore, arbitration panels hold significant power over not only individual rulings, but the progression of the entire arbitration. There have been some abuses in the past, but with recent developments the environment for a full and fair hearing has improved significantly. The vast majority of FINRA arbitrators are intelligent, diligent, well meaning, and fair individuals. But still, going through the arbitration selection process is an extremely important function for the lawyer and the expert to work through together. This is a process that an expert and particularly Mr. Schulz, having been in over 1,100 securities cases, is intimately familiar with.

The above factors makes the securities expert, except in the smallest of cases, a critical component.