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Investors, like all consumers, sometimes have a valid complaint against the people they are dealing with. If you have a problem with either the company or mutual fund in which you have invested, or with your broker-dealer, there are certain steps you may consider taking. In many instances, the complaint has arisen from a simple misunderstanding and can be solved without formal action.
The first step is to contact the appropriate official of the entity
involved, preferably a senior official responsible for shareholder or
customer relations. For example, in the case of a corporation or a
fund, you may contact the secretary, or for a broker-dealer, it may
be your account executive and the branch manager of the firm. When
talking to this person, you should:
* Explain your problem as clearly and concisely as possible;
* Describe the background of the problem, including the details of any transactions, in chronological order;
* Describe the present status of the matter and the adjustment that you seek and why you believe that you are entitled to it;
* Confirm the complaint in writing (if the initial contact was made by telephone or personal interview). This is most important because some organizations do not consider a complaint serious unless it is in writing. Also, for regulatory purposes, broker-dealers are required to retain customer complaints on file.
If the steps outlined here do not resolve your problem, there are further courses of action possible. For example, a dispute with a broker-dealer may be submitted to arbitration. But in many cases, disputes may be settled more quickly to the benefit of all involved through informal means.
While the SEC is not authorized to represent individual investors in actions for recovery of money damages, inquiries and complaints from investors are a primary source of information for detection of securities law violations. The SEC uses this information to bring court action to stop unlawful action, and to formulate policies and rules to prevent recurrences of problems that may harm individual investors.
If you cannot resolve a problem satisfactorily through discussion and correspondence with the organization involved, you may wish to consider contacting the Securities and Exchange Commission's Office of Consumer Affairs, 450 5th Street, N.W., Washington, DC 20549, or one of the SEC's regional or district offices (located in Atlanta, Miami, Boston, Chicago, Denver, Salt Lake City, Fort Worth, Los Angeles, San Francisco, New York, and Philadelphia). The SEC staff will respond to all investor complaints and inquiries, answer questions, and where appropriate, contact the organizations involved for response to particular investor problems.
When writing to the SEC, you should always include:
* The name and address of the organization involved;
* The name of the security involved;
* Any account number;
* A brief description of the problem;
* Copies of any related documents (for example, confirmations of transactions and monthly account statements) and/or copies of any correspondence regarding the matter
It is also helpful to include a daytime telephone number where SEC staff can reach you with any questions. If you are simultaneously giving copies of your complaint to other individuals and/or securities industry organizations, please so indicate in order to reduce duplication of efforts.
The federal securities laws administered by the SEC are designed to help investors make informed investment analyses and prudent and discriminating investment decisions. The SEC cannot, however, approve or judge the merits of securities. It can only provide you with enough information to make that decision yourself. The federal securities laws also regulate brokers and dealers and other professionals in the securities industry. An investor should understand, however, that the SEC cannot act as a court to decide individual disputes, and under the federal securities laws, it cannot take action in a court against an entity on behalf of an individual.
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