New Jersey Certified Civil Trial Attorney - Brokerage Accounts - Bad Investments. By Patrick Amoresano - You're question suggests a "suitability" issue which may enable you to make a claim against your consultant, depending on the written profile and instructions you've given him over time. This is not the sort of work I do, but I happen to know a lawyer and law firm that handled hundreds of thousands of similar claims in a class action suit against a big brokerage house. If you'd like me to refer you there, you may contact me at the number on my profile.
You opened your account, according to your question, when you were about 55. You say "he never listened to my continuous demands." Your claim raises a question of why you stayed with him for 7 years. When you opened the account did you direct that your objective was to protect retirement assets? How did you describe yourself as an investor: conservative or strongly agressive or somewhere in between? All this information and more shoud be in the documents that you signed when you opened the account, as they may have been modified from time to time.
When you opened your account, you agreed, albeit not voluntarily, to arbitrate any claim that you might have against your broker and his company. The forum for arbitration is a self regulatory agency called FINRA (the Financial Industry Regulatory Authority). You waived any right to make your claim in a court. The rules of FINRA are those approved by the SEC.
FINRA has certain rules relating to the suitability of investments made by a broker and the broker is also subject to approprate supervision by his company. The failure to follow these rules, among a host of other standards and requirements, may be grounds for redress against your broker in a FINRA proceeding. Fundamental to any claim is that the investor show financial loss as a direct consequence of a broker's failure to meet the standard of care or of his or her fraudulent conduct.
To recover, you will have to initiate the claim under the auspices of FINRA. You are not required to be represented by counsel. However, any broker will be represented and without counsel your chances of prevailing are very substantially diminished. If you obtain qualified counsel, you will receive details about the procedures and expenses involved.
I respectfully suggest that you promptly obtain counsel and have your case reviewed. You state that your loss ocurred in 2008. That sounds like it might be as much as 5 years ago.
Options for Investors
As an investor, you have several options for resolving your securities-related dispute. You may contact the brokerage firm involved in your securities-related dispute, file a claim in arbitration, pursue settlement through mediation, file a complaint with a securities regulator, including FINRA, or contact the FINRA Office of the Whistleblower.
Talk to Your Brokerage Firm Prior to Filing a Claim
In the event that a discrepancy or dispute arises, your first course of action should be to report the matter in writing to your broker's manager or the brokerage firm's compliance department.
Initiate an Arbitration
If you are not satisfied with the brokerage firm's response or you seek monetary damages or other restitution, you may file a claim against the broker, brokerage firm or both in arbitration.
Initiate a Mediation
If all parties agree, you may pursue your claims in mediation.
Even if you have pursued one or more of the actions above, you may also file a written complaint with the SEC, the FINRA Investor Complaint Center, or with your state securities regulator. You may file a tip with FINRA's Office of the Whistleblower or the SEC's Office of the Whistleblower, if you have evidence of illegal or unethical activity at a brokerage firm.
File an Investor Complaint
FINRA's Office of the Whistleblower
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Your case presents many issues as far as I can tell. First, the invesments recommended to you had to be in accordance with your STATED investment objectives. Look at the forms you filled out to open the account and make the UIT investments. Were you objectives misstated? Was your annual inomce or net worth inflated or deflated?
Second, what we're these UITs in? There are plenty of cases out there with people complaining about real estate investments, but the the fact the investments went down isn't itself the basis to bring a suit. Did you receive dividends? Did you ever try to sell? Soe one th many questions that you will face in an FINRA arbitration.
Note also that you will have to ascertain whether the investments made were indeed "permitted investments" under the rules of the financial planner's broker/dealer. If these products' sponsors don't have selling agreements with your rep's broker dealer, you have whole host of other issues to consider.
Happy to assist fuirther. Whatever you do, don't file a FINRA arbtiration pro se. Get youself an attorney to handle this.
The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.
I have sued over these products before and won. This would have to be brought before the Financial Industry Regulatory Authority or FINRA and there is a 6 year statue of limitations to bring claims. UITS are a relatively new investment vehicle and most investors are not fully aware of the many risks associated with these instruments. a UIT is a fixed portfolio with a finite life that invests in socks or bonds. It is essentially a static basket of securities with an expiration date. UITs are very expensive to invest in and carry large sales charges. There is a large up front sales charge or “load” with an additional sales charge being charged over the life of the UIT all going to compensate the broker. In addition to the large sales charges UITs carry recurring fees for administration charges which can be as high as 1%. When a trust expires and it is rolled over into a new but almost identical UIT, the investor gets hit again with a new up font sales charge and commission running over the life of the new UIT. Compared to the average unmanaged index-fund the investor pays almost 8 times the commission and administrative fees to purchase a virtually identical basket of securities. Depending on how aggressive of an investor you were and what your risk profile is you should consider suing.