The answer, I'm afraid, is maybe. There is much information that an attorney would need to determine whether your advisor acted in a manner that would put him or her on the hook for the Madoff investment. For example, was the nature of the investment "suitable" for you given your financial profile at the time? Did the broker (or his/her firm) have sufficient information available to them to raise questions about the investment's legitimacy? You should meet with an attorney specifically experienced in securities arbitration cases to help you with this assessment. And there are some in Arizona. Your first stop in finding one should be the Public Investors Arbitration Bar Association (PIABA), www.piaba.org.
Both the Arizona Securities Act and the federal securities laws create claims against sellers of securities who conduct their business by way of misrepresentation or half-truth (omission to state material facts).
The important question in my mind is whether the financial advisor was in the chain of sale of the securities (investments) in question. For purposes of answering this question, I will assume he was. Section 44-1991 of the Arizona Securities Act creates in you a right of rescission for this purchase from any person who employed a device to defraud, made an untrue statement of material fact, told a half-truth, or engaged in any course of business which would operate deceptively.
If you are able to establish that the financial advisor did one of the foregoing bad things, the burden of proof shifts to the financial advisor to demonstrate that he or she (1) didn't know and (2) in the exercise of reasonable care, could not have known of the fraud.
You have some remarkably good facts in your case in that the SEC has sued PIWM and its principal for fraud. There certainly seems to be some strong support for the contention that a fraud occurred. The question then becomes: "Did your financial advisor exercise reasonable care in trying to determine/discover whether a fraud was being perpetrated by PIWM?"
(1) What type of due diligence did your financial advisor or his company perform regarding PIWM?
(2) Were there warning signs or red flags that the advisor or his company ignored in selling you the securities in question?
These are important questions you need to answer to determine the strength and merits of your case.
And, as always, don't wait to get going! The federal and state securities laws have extremely unforgiving statutes of limitations. Section 44-2004 of the Arizona Securities Act provides that you have two years after the discovery of the fraud to file suit and, in any event, no more than 5 years after the sale of the security.
Remember: I'm not your lawyer, and this is not legal advice. Consult your own attorney.
More information would be needed to answer this question. But I can tell you that many people received legal recoveries for losses they sustained with Bernie Madoff from their investment professionals due to the lack of due diligence by their professionals. Stockbrokers and investment advisors have a duty to conduct an adequate level of due diligence to determine if the investment they recommend is suitable for anyone. This includes know the level of assets and liabilities. Investment professionals recommending investments without this requisite level of knowledge do so at their own risk. So if the investment is a Ponzi scam that a reasonable amount of due diligence would have uncovered, such as with Madoff, the investor may be entitled to recovery.
Please keep in mind that we do not represent you and that more information would be needed to fully and accurately evaluate your case. Further, you should seek representation because your matter is governed by strict time limits.
The Madoff matters are incredibly complex and intensely fact intensive cases that revolve around the method of sale, where they were placed and how. If you purchased the fund through a broker/dealer or an investment adviser, you may (emphasis on may) have a cause of action against them based on various due diligence issues. You will need to discuss the specific facts of your case with a securities attorney who has handled hedge fund related litigation and has some familiarity with the receivership/bankruptcy process. Whatever causes of action you may have, these things will invariably dictate what you can do to recover your funds.
The foregoing is not legal advice nor is it in any manner whatsoever meant to create or impute an attorney/client relationship.