You can sue someone for pump and dump. However, you may be able to recover losses from a pump and dump scam without going to court. Instead, you may have the option to take your case to arbitration. A successful arbitration claim can result in a resolution that covers your losses.
That said, filing a strong claim and making a strong case as to why you should receive compensation for your losses can be difficult. You’ll want to work with an experienced pump and dump lawyer to have the best chance possible of receiving a fair outcome. Let’s take a closer look at how to recover damages from a pump and dump scam and how an attorney can help you.
What Is a Pump and Dump Scheme?
A pump and dump scam occurs when an investor buys a cheap stock and spreads dishonest information about it that makes it seem like an attractive investment opportunity. Once other investors start to purchase the stock, the fraudster spreads even more information about the “investment opportunity.”
Once the hype around the stock has caused it to reach a high, falsely inflated price, the fraudster “dumps” or sells their shares, which makes them an enormous profit, dramatically lowers the value of the stock, and leaves other investors scrambling to get rid of their worthless shares.
These types of schemes are in violation of securities law. You have the legal right to sue someone for a pump and dump scam if you are affected by one. Reach out to an attorney today to learn more about your best course of action moving forward.
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How to Sue Someone for a Pump and Dump Scam
Suing someone for a pump-and-dump scam can be a difficult and time-consuming process. To get the most out of your suit, you’ll want to work with a skilled investment fraud lawyer. An attorney can gather evidence of fraud, use the records and information they collect to construct a compelling suit, and fight for the compensation you deserve in court.
If the scam was sold to you by your financial advisor, chances are that in order to pursue the recovery of your losses, you will need to pursue your claim in FINRA arbitration.
An experienced lawyer will be able to review the facts of your case and determine which course of action is best suited to your unique situation.Â
Taking Your Pump and Dump Claim to Arbitration Instead of the Courtroom
When you meet with a lawyer to discuss your case, they’ll likely explain that you must take your claim to FINRA arbitration instead of suing the fraudulent financial advisor for pump and dump. Arbitration claims are handled by the Financial Industry Regulatory Authority (FINRA).
During arbitration, both parties involved in the dispute will present their sides of the case to a panel of one to three arbitrators. These arbitrators will make a final decision on the matter that, in most cases, is final and legally binding.
If you plan on taking your claim to arbitration, working with an experienced and well-connected attorney is critical. A lawyer who has connections with FINRA arbitrators can make sure the arbitration process is as fair as possible.Â
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Compensation You Could Receive from a Pump and Dump Lawsuit
Whether you are suing someone for pump and dump or taking your case to arbitration, you could receive a number of damages. When you meet with a lawyer they’ll determine which damages you’re owed and how much you should receive in total.
If your case is successful, you could receive any of the following financial remedies:
- Reimbursement for your investment losses
- A portion of the money that fraudsters made through the pump and dump scam
- Attorney’s fees
The ideal resolution will reimburse you for the losses you’ve incurred and give you the financial support you need to move past this frustrating time in your investment career. Get in touch with a lawyer today to learn more about the damages you could receive from a winning pump and sump suit or arbitration claim.
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Meet With a Trusted Pump and Dump Lawyer for Free
At Meyer Wilson, we understand how hard it can be to recover from a pump and dump scam. That’s why we’re committed to getting you the compensation you need to replace your losses and put this unfortunate incident behind you. With over 75 years of combined experience, we’re confident we have the skills and resources necessary to get a fair outcome.
Contact our firm today to schedule a free consultation with a pump and dump lawyer and learn more about your legal options.
We’ll meet with you to discuss your losses, advise you on whether you can sue someone for pump and dump, and answer any questions you may have about the arbitration process.Â
Recovering Losses Caused by Investment Misconduct.