If you have lost a significant amount
of your savings trusting the investment advice
of a stockbroker, there may be something you can
do to recover your losses.
Under the law, stockbrokers have
a duty to "know their customers," which
means that they have to take the time to learn
about your assets, your needs, your investment
experience, and your willingness to accept the
risks of the market. Based on that knowledge,
stockbrokers have a duty to recommend only those
investments that are "suitable" to you.
For example, if you are nearing
retirement and looking to invest your savings
to provide a long-term income, an investment in
risky technology stocks would very likely be unsuitable
to you. It may even be the case that it would
be unsuitable for a broker to place more than
a small percentage of your savings in the stock
market at all.
Similarly, if a stockbroker advised
you to invest your savings in a complicated insurance
policy (often called a variable annuity) that
exposed you to high fees and denied you access
to your money when you needed it, the law may
well provide you with relief.
These are just two of many situations
in which you may be entitled to get some of you
money back.
Today, all customer agreements with
stockbrokers contain binding arbitration clauses,
which mean that if you do file a claim against
your broker, you will not have the chance to have
your case heard by a jury. The good news, however,
is that an arbitration normally moves more quickly
than a case in civil court, and there is no right
for you or the broker to appeal. Typically in
North Carolina, unless your case is settled (which
happens around 70 percent of the time), your case
will be argued before a panel of arbitrators approximately
ten months after you file the suit.
While the lawyers for the stockbrokers
fight hard to deny your claim, and it is not often
that investors recover all their losses, the recoveries
can be significant. And when it comes to recovering
your lost savings, something is always better
than nothing.
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