Customer Claims Against Brokerage Firms and Individual Brokers, Commodity Attorney

QUESTION

Is there a limit on the amount of time a customer has to file a claim?

ANSWER

A statute of limitation provides the amount of time a customer has to bring a claim. Generally, the period of limitations begins to run from the date the customer knew or should have known that he suffered damages as a result of the broker's wrongdoing. Each jurisdiction provides its own period of limitations for each claim (e.g., breach of fiduciary duty or fraud). Periods of limitation generally do not exceed five years for any claim. They also have their own rules for determining when the period of limitations begins to run and when it temporarily stops running (e.g., while the customer was mentally incompetent). The Securities and Exchange Act of 1934 states that a claim must be brought within one year of the date when the plaintiff knew or should have known of the claim. This statute further states that a plaintiff only has three years after the claim arose even if the he did not know of its existence. Similarly, the NASD has a six-year limitation on the amount of time a claim must be filed from the date of the occurrence or event that gave rise to the claim--whether or not the period of limitations has expired.

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