Can I sue my Financial Advisor?

Asked over 4 years ago - Los Angeles, CA

My family was lured into signing up with a Certified Financial Advisor who put alot of people into REITs and failed to inform any of them of the risk of defaults or even to explain the risks of the investments. Many of these REITs are now illiquid and the Financial Planner has more or less vanished. He failed to advise people when they were going under and apparently made large commissions up front when they were sold. He also has a large # of senior clients. Can we sue the Financial Advisor?

Additional information

The planner has not literally vanished, he is simply failing to communicate with clients and disclaiming any involvement.

Attorney answers (2)

  1. Pamela Koslyn

    Contributor Level 20

    Answered . Yes, but it might not do any good if he's vanished and he has no assets you can attach.

    Have you and the the other clients thought about reporting this to the City Attorney, to see if they'd be interested in pursuing this?

    Disclaimer: Please note that this answer does not constitute legal advice, and should not be relied on, since each state has different laws, each situation is fact specific, and it is impossible to evaluate a legal problem without a comprehensive consultation and review of all the facts and documents at issue. This answer does not create an attorney-client relationship.

  2. Theodore Lyons Araujo

    Pro

    Contributor Level 20

    Answered . You should seek a lawyer who practices in the area of securities arbitrations to review the facts.

    When deciding if you should sue someone there are two essential requirements. First, did the person who you think violated your rights have a duty to refrain from the activity that you think would form the basis of a suit or did they have a legal duty to do something and they did not do it. It is very difficult to determine the answer to that question based on the facts you list because it will depend on State law and possibly administrative law in your State and under Federal Law.

    The second essential is where there compensable damages? Damages for which a Court can award you monetary awards or injunctive relief (order the other person to do something or stop doing something). If you have both of these elements you may sue.

    However, lawsuits take a high degree of expertise and cost money. Many clients have come to me through the years and stated that the money did not matter to them, just the principal of the issue! When I tell them how much I and other lawyers charge by the hour it becomes obvious to them that the value of the lawsuit damages is very important.

    You can seek out your lawyer referral service to seek counsel. There are agencies of the State and Federal Government you may want to contact. Talk to a lawyer before you decide to sue someone for expert legal advice!

    Good Luck!

    Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship. The opinions expressed herein are those of the author only and the fact that he has worked as an Assistant District Attorney; State Supreme Court Clerk; Special Assistant United States Attorney (Hawaii); Assistant Cornell University Counsel or Judge Advocate, United States Marine Corps should not be relied upon to assume that these statements reflect the policy of these organizations.

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