Consult with a lawyer who is experienced in representing investors. Many people with valid claims never recover because they believe the losses are their own fault, it's too late to bring a claim, or that documents they have signed bar recovery.

A knowledgeable attorney will examine and advise you on the following issues:

• Has some form of recognized misconduct occurred?

• Did such misconduct cause an economic loss?

• How much money can you hope to recover?

• What is your proof of both the misconduct and the loss?

• Do you have a choice between court and arbitration?

• How much will it cost to pursue your claim?

• How likely is it that your claims are barred by time limits?

• Will you be able to collect any award or judgment?

Most investor arbitrations take place under the rules of the National Association of Securities Dealers, the New York Stock Exchange or the American Arbitration Association, and are conducted by a panel of three arbitrators. Once your claim is filed, the NASD will attempt to serve it on the defendants, who have 45 days to file their responses. After that, the parties usually draft and serve each other with requests for information and relevant documents.

Hearing dates are usually scheduled 12-18 months after the claim is filed, and are normally held at a NASD location closest to the claimant's residence. Before the hearing, the parties or their lawyers often submit briefs containing their factual and legal arguments. After any pre-hearing motions are decided, the parties or their representatives make opening statements, and the claimant puts forth his case — calling witnesses, testifying, and offering exhibits. As in a trial, all parties have the right to cross-examine each other's witnesses and (with the panel's permission) conduct redirect examination. In addition, the panelists may ask their own questions. After the claimant has presented his/her case, the respondents present theirs. All parties have a chance to make closing arguments.

The hearing can take anywhere from one day to several weeks. When it is concluded, NASD sends copies of the written award to the parties. If the investor wins an award, the member firm or associated person must pay promptly or face disciplinary action.

Obviously, it pays for any investor, aggrieved or not, to preserve every scrap of paper or piece of correspondence associated with their account. Original documents, statements, and correspondence are far superior to copies, particularly because both customers and brokers tend to make handwritten notes on the originals.

Most arbitrators are accustomed to hearing conflicting testimony. Therefore, arbitrators usually analyze any documentary and circumstantial evidence to reach their decision. The best thing an aggrieved investor can do is to become thoroughly conversant with every detail of his case. Arbitrators place a premium on truthfulness, and are far too experienced to give credence to unsupported claims. Investors can help their cases by making contemporaneous notes and keeping diaries of all discussions with their broker, and by confirming every representation, promise, or guarantee in writing to the broker and even the branch manager.

Keep in mind: your previous conduct constitutes circumstantial evidence, and could be vital to your claim's success. An investor who took no reasonable steps to protect his/her financial interests will probably be judged as having ratified (or even adopted) the kind of misconduct practiced by the defendant. It is especially helpful to establish chronologies that demonstrate connections between a loss and the broker's actions. Locate phone bills, receipts, or notes that substantiate your conduct, illustrate your level of investor sophistication, or show your lack of control over investment decisions.