A Word of Advice

1. A Word of Advice Mark E. Maddox Maddox Hargett & Caruso, P.C. Securities Law

2. Investor Losses • Family members also can steal from each other • Spouses, siblings, caregivers, anyone can be victimized by securities fraud • Example of investor loosing nest egg • Anyone who manages your money can commit securities fraud or negligence

3. Securities Fraud, Who is at Risk? • Anyone with money • Young, old, sophisticated, novice • Elderly are increasingly vulnerable • Caregivers, adult children • Family members stealing from each other • Spousesand siblings

4. Staying Above Board • Understand all investments you sell • Don’t be pushed to sell the company’s “hot product” • Evaluate if the investment is right for your client’s age and sophistication level • Make your commissions transparent • Disclose, disclose, disclose! Never fib, not even a little • Report unethical behavior of your colleagues

5. Fiduciary Duty, Due Diligence • Acting in the best interests of the client • Recommend suitable investments • Review client’s monthly statements • Thoroughly understand risk, volatility of investments • Don’t blame losses on “economy” or “market downturn”

6. Whistleblower Support, Are you Protected? • SEC Whistleblower Program, effective July 2010 • In 2013, the program paid out more than $14 million • You are not required to be an employee to submit information • An eligible whistleblower is: • A person or persons, not a company or organization • Someone who voluntarily provides original information • A person who acts on information that is either ongoing or about to occur

7. FINRA: Self-Regulatory (SRO), Financial Industry Regulatory Authority • The largest non-governmental regulator for securities firms • Mission is to protect investors and promote market integrity • Oversees brokerage firms, their branch offices and registered securities representatives • All brokerage firms must become members • FINRA touches every aspect of the industry: • Educating investors • Examining securities firms • Administering dispute resolution decisions

8. The FINRA Arbitration Process • Brokerage firms require investors to sign documents, stating all disputes will go through arbitration • The occurrence must be less than six years old • Process, start to finish, is about two years • Average filing fee is $1,300, depending on the claim • Documents help substantiate the claim • Arbitration awards are final, binding and hard to appeal

9. Evaluating Investment Losses • How do we evaluate a claim? • Calculated investment losses • Analyzed market conditions • Analyze suitability of investments • Review of commissions and fees • Evaluate pattern of trading and activity • Review a Claimant’s investment experience

10. What Makes a Good Case? • Is the firm or stockbroker FINRA registered? • What did the broker say about the investments? • What transpired with the investments and why? • What were the investor’s goals? • What was the investor’s previous investment experience?

11. The Wolf of Wall Street • Jordan Belfort- Stratton Oakmont • Our firm represented more victims of Stratton Oakmont than any other securities law firm