Financial advisors can be liable for bad investment advice, if that advice falls below the standard of care in the securities industry or otherwise violates the laws or regulations. If an advisor recommends an investment that isn’t suitable for you and you lose money, you may have the right to pursue compensation from them. That said, seeking damages for an investment loss can be a difficult and confusing process.
Hiring a skilled investment fraud lawyer in Ohio can ensure your case is handled correctly, giving you the best chance possible of recovering your losses. Let’s take a closer look at investment advice liability and how an attorney can hold your financial advisor responsible for your losses.
Bad Investment Advice That Financial Advisors Can Be Held Liable for
When you sign a contract with a financial advisor, they take on a certain duty and must provide a certain standard of care when handling your hard-earned money. Their duty to you includes recommending investments that suit your unique situation and goals.Â
When an advisor offers advice that isn’t aligned with your goals, they can be held liable for the losses you incur. One example of bad investment advice that a financial advisor can be held liable for is recommending a high-risk investment when you have communicated to them that you are risk-averse.
Another example of bad investment advice may be when an advisor recommends an aggressive investment strategy to an elderly investor. If you’ve lost money due to a recommendation that was too risky for your current situation, an unsuitability claims lawyer may be able to seek compensation for you.
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Advisors Can Be Held Liable for Recommending Fraudulent Investments
Another scenario where financial advisors may be held liable for bad investment advice is when an advisor recommends a fraudulent investment scheme. For example, if your advisor recommends an investment that turns out to be a Ponzi scheme, you may seek compensation for the losses you take on due to fraud.Â
A Ponzi scheme is only one example of the type of investment fraud that an attorney can help you take action against. No matter how complicated your case is, you can count on a lawyer to investigate your investment losses, file a claim on your behalf, and pursue comprehensive compensation for your losses.Â
How an Attorney Can Hold Your Financial Advisor Liable
Your lawyer can hold your financial advisor liable for bad investment advice by filing a Financial Industry Regulatory Authority (FINRA) claim. By filing a FINRA claim, your attorney will initiate the arbitration process. During arbitration, you and your financial advisor will meet with a third-party arbitrator who will hear both sides of the story and will resolve the dispute.
If your arbitration claim is successful, you may receive a resolution that will cover the investment losses you incurred due to bad advice. To make sure you get the best outcome possible, you’ll want to work with an experienced attorney who has received positive reviews from past clients and has a track record of successful FINRA claims.
While there is a chance you may need to file a civil suit against your advisor to get the compensation you’re owed, it isn’t likely. That’s because most bad investment advice cases are resolved through the mandatory arbitration process. An attorney can explain arbitration further and answer any questions you have about your case.
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Compensation You Can Receive From an Arbitration Claim
If you’ve decided to seek compensation for losses due to bad investment advice from a financial advisor, you’re probably wondering which forms of compensation you could receive. Depending on your unique circumstances and the losses you’ve incurred, you could receive any of the following damages from a claim:
- Compensatory Damages
- Punitive Damages
- Interest
- Attorney’s Fees
- Cessation of contract
Working with a skilled broker misconduct lawyer can ensure you get all the damages you’re entitled to receive. An attorney can review your case and calculate how much you should receive from an arbitration settlement. You can count on a lawyer to protect your best interests throughout the claims process and pursue the results you need to move forward.Â
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Losing money due to poor investment advice can impact your finances and your confidence in future investments. The good news is that the team at Meyer Wilson can help you file a strong claim and recover the money you lost. We have over 75 years of combined experience and have recovered over $350 million for clients like yourself.
You can rely on a lawyer from our team to pursue maximum compensation on your behalf. Contact us today to schedule a free consultation with an attorney and learn more about your legal options moving forward. We’ll advise you on whether financial advisors can be held liable for bad investment advice and answer any other questions you may have.Â
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