Author: Dustin Wetton
During the recent economic decline, many American’s lost much of their investments in the stock market. While loosing money can cause hardship, permanent damages, and harsh repercussions, by itself it does not open the door to sue somebody. After all, the main person to sue sometimes would be ourselves, as it was our decision, based upon our knowledge, to take a risk and gamble our money in a market that can be as unpredictable as earthquakes. So, why did you loose your money?
If it was based on bad luck, bad timing, or bad choice on your part, then that just comes with the territory. The capital market is know for its harsh ups and downs, and no matter how much the government may try and soften these punches, the market will continue its ocean-motion of ups and downs, and thus a good investor is a person who can see the dips and the inclines, and react smartly to them. Thus, if money was lost based on these issues, I’m sorry, but its you to blame for loosing your money, and thus, you can contact us or any other attorney to see if you have a valid suit against yourself for damages, and maybe even intentional infliction of emotional distress.
However, let’s say that you lost your money based on the faults of your financial broker, advisor, or fund manager. Were you a victim of fraud? These individuals are meant to give you financial advice, through a fiduciary duty owed to you, to help you invest your money based upon your investment profile, and given the recommendations that you knew of and knew the risk of. If they followed these steps, and gave you “bad” advice, then there is not much room for suing still. Yet there are some things that these individuals can be caught in the act and be held liable for, such as:
1) Breach of duty of care – This is a duty of a financial advisor to act with care in giving you financial advice. While this duty is protected by the business decisions exception, if your advisor gave you tips that were out of the realm of normal everyday business practices, then they can be held responsible. While this is often argued for, it is difficult to prove that the business exception rule does not apply.
2) Misrepresentation – This duty is to ensure that all information given to you is to the best of the advisors knowledge true. Thus, if they intentionally or negligently misrepresented facts to you, you bought onto these facts, and relied upon them in making your investment, and damages were caused upon you…then you have a good case against your advisor.
3) Going Against the Flow – This is not the legal term, because it mostly captures an array of suits that fall into it. If the broker did not follow contract terms, or did not listen to reports of unsuitability, or lack of diversification, then there are actions that can be brought against these individuals.
4) Breach of Loyalty – This is a duty to act in the best interest of the client in all decisions made for that client. This duty is breached when an advisor acts in their own interest, to better either themselves, or someone that they know. This is easily spotted with good evidence, and can cause many problems for advisors that went down this sour road.
These are all good actions that may apply to those of you who thought it wasn’t your fault. Also, remember that theft is always a good choice for legal action as well. If there are any signs of schemes, pyramids, or any other sketchy action taking place with your broker, be sure to seek legal help. As always though, while your advisor might have let you down, or you ran into bad luck, it’s always a good idea to be active and on top of your financial investments.
If you have any questions or comments regarding this blog, email us at blog@lauruslaw.com.
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