How to File SEC Complaints Against Brokers

iEditorial Note: These blog posts represent the opinion of DoNotPay’s Writers, but each person’s situation and circumstances vary greatly. As a result, you should make sure to do your own independent research. Because everyone is unique, our self-help tools are never guaranteed to help with any specific situation. DoNotPay is not a law firm and is not licensed to practice law. DoNotPay provides a platform for legal information and self-help.

How to File SEC Complaints Against Brokers

Stockbrokers are essential players in a stock market. They help people buy and sell stocks. They also keep track of stock prices and give people market updates constantly. However, there are unscrupulous brokers and brokerage firms that try to cheat people by manipulating the market.

In January 2021, relying on tips from a Reddit group, some people invested their money in stocks like $GME, $AMC, $NAKD $EXPR, and their prices skyrocketed. Popular brokerage firms like Robinhood restricted trade on these stocks in a deliberate attempt to stifle these stocks.

The decision was outright wrong, but many people did not know how to file a complaint with the SEC. Luckily, DoNotPay offers you an opportunity to to the Security and Exchange Commission (SEC).

How Brokers Manipulate the Market Through Pump and Dump

Stock market fraud is at an all-time high. There are several scams that a new investor needs to become aware of before investing in the stock market. One common fraud that many investors fall victim to is a pump and dump scheme. A broker will buy a large amount of a low-volume stock with no prior interest or news about the company. Then they will proceed to pump up the price of that stock with false-positive information.

Other investors will see the stock's sudden jump in value and start buying it, too, not fully understanding what is happening. At this point, when there are enough new investors who want to play along for the ride, the original broker dumps all of his shares at once on everyone else. If there are enough new investors, he makes a handsome return on his scam. If there aren't, he loses money.

It should be evident how unethical this is. The broker gets rich off of other people's hard-earned money and leaves them in ruins with losses in an already volatile market. We at DoNotPay want to make it as easy as possible for you to fight back against such scammers.

How to Report Brokers to the SEC On Your Own

As the stock market is volatile if manipulated by brokers, many investors can lose all their savings. Thankfully, the SEC has given everyone the opportunity to report any fraud-related activities. It's best to report it as soon as possible because the SEC will have more time to look into your allegation. You need to provide the following information to SEC:

  • Date when the transaction occurred.
  • Correspondence with the broker regarding the transaction.
  • Proof of payment/investment.

When reporting the broker in question, you need to supply the SEC with the following information:

Your DetailsYour name, address, and all relevant information enable the SEC to identify you and reach out in case of any clarifications.
The Broker’s DetailsDetails about the broker, including their physical address, company, phone number, and any relevant information.
The ComplaintA comprehensive description of the complaint. For example, you can indicate that the broker suddenly stopped trading in particular stocks.

As a top tip, you need to be as elaborate as possible in your complaint. Having sufficient evidence enables the SEC to robustly investigate the complaint and provide a speedy resolution to your claims.

While you may be tempted to file a report to the SEC against brokers on your own, it can be frustrating, time-consuming, and complicated if you don't have the requisite know-how. Fortunately, with DoNotPay, you don't have to despair. DoNotPay makes it smoother to report brokers. It enables you to report any errant brokers to the SEC in under five minutes by following the prompts in your SEC broker complaint.

How to Report Brokers to the SEC Using DoNotPay

If you want to file an SEC complaint but don't know where to start, DoNotPay has you covered. Create your own cancellation letter in 3 easy steps:

  1. Search SEC Complaint on DoNotPay.
  2. Answer basic questions about your broker and complaint (you can also use your automatically generated complaint template).
  3. DoNotPay will automatically run a bot to work on your behalf and securely fill out your SEC complaint form.

Once you follow these instructions, there is no need to provide additional information. Rest assured that DoNotPay is reporting the matter to the SEC for resolution.

What Complaints Can You File Against Brokers?

As a US citizen, the SEC’s foremost duty is to protect investors from market manipulation. Towards this end, you need to know what complaints can be filed with the SEC. These include:

  1. Professional misconduct
  2. Theft or embezzlement
  3. Operating a Ponzi scheme
  4. Providing misleading or incomplete stock advice
  5. Submit SEC fraud report
  6. Manipulation of the stock market
  7. Complaints against brokers
  8. Bribing foreign officials
  9. Insider trading

DoNotPay Is an All-In-One Service Provider

DoNotPay is a one-stop tailored platform to help you resolve legal issues, financial issues, and an array of other problems at a click of a button. Apart from helping you report a stock broker to the SEC, you can also do the following:

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