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Raymond James Scores an Important Legal Victory

May 20, 2013

A legal victory for Raymond James in Florida, limiting the amount of time investors have to file a complaint against their brokers, may benefit advisors in other states.

Florida’s Supreme Court ruled last week that the state’s statute of limitations can be applied to securities arbitration cases and not just court cases, Reuters reports. As a result, securities arbitrators in Florida and elsewhere may have the backing to give investors less time to file a complaint with the Financial Industry Regulatory Authority.

Cases can typically be referred to Finra for arbitration if a complaint is filed within six years of the precipitating event. But in Florida, where many arbitration cases are filed because of the high number of retirees, the law sets a four-year deadline for filing a negligence complaint in the courts and a two-year limit for claiming securities fraud, according to Reuters. Those limits now apply to arbitration cases as well.

The case the court ruled on last week was filed in 2005. Plaintiffs alleged that money-losing investments dating as far back as 1999 were too risky and should have been diversified. The court sided with Raymond James, which argued that the investors filed too late.

Jonathan Uretsky, a securities lawyer who represents brokerages, told Reuters the decision could be used by high courts in other states in deciding whether arbitration cases should fall under state statutes of limitations.

By Elizabeth Jensen
  • To read the Reuters article cited in this story, click here.