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Can Investors Sue Financial Advisors For Coronavirus Losses?

Most investors right now are just starting to realize their losses in the stock market because of the coronavirus. Many of these “loses” will come back, but some won’t. Millions of retired investors had their savings in the market and can’t go back to work.  Even worse, a lot of seniors were counting on the income from their investments for retirement.

Can I sue my financial advisor for losses caused by the coronavirus? The short answer is yes. Although you can’t sue China. There are a couple of options for people to recover losses and they are best explained by lawyers that specialize in this field. interviewed Matt Thibaut, a partner at Haselkorn and Thibaut (, who specializes in recovering losses for investors.  Investors can call Haselkorn & Thibaut at 1-888-628-5590 for a free case consultation on investment loss recovery. His law firm is nationally known as a leader in securities and investment laws regarding investors.  We asked him about options for investors to recover damages.

Can I really recover my investment losses?

Well, as with many things that are more complicated than they might seem on the surface, that may or may not be true. When potential clients call us, the market events are only one piece of the puzzle as we investigate potential cases. ‘

Whether you have a valid claim to recover your investment losses often has very little to do with the ups and downs in the market itself and more to do with a thorough investigation into a lot of other issues related to your investments.

These claims can potentially include any one or more of the following: unsuitable recommendations, unsuitable investment strategy, negligent supervision, negligent investment advice, financial advisor malpractice, over-concentration, fraud, misrepresentation, omissions of material facts, breach of fiduciary duty, violations of securities industry laws, rules and regulations intended to protect investors.

What is the investment loss investigation?

For example, let’s start with the overall suitability of your portfolio’s asset-allocation – an asset-allocation guided by your investment objectives and risk tolerance. This goes back information and documentation that likely pre-dates any of the recent market or news events.

It also focuses more on your individual situation, if you are retired, living on a fixed income, able to replenish principal losses while you are still working, and what you told your financial advisor you were looking for from your investment portfolio in terms of income, preserving principal, not incurring losses in excess of 5-10-15 percent, etc. Also, did your situation change at all prior to recent market events? Medical issues, family issues, anything that materially impacted your need to preserve capital, increase income or liquidity?

When we take a look at a potential case, aside from the losses, we examine the portfolio to get a clear understanding of its construct to determine if there is liability on behalf of your advisor and/or employing firm.

Your financial advisor and his/her employing firm have an obligation to recommend a suitable portfolio and asset allocation based on your age, investment experience, tax status, liquidity needs, investment objectives, risk tolerance, time horizon and any other material information you provided to your advisor.

These criteria are summed up by the advisor’s obligation to “know his/her customer.” This may also change as events in your life change. The asset allocation, risk exposure, concentration issues, are all issues that likely pre-dated the recent market events by months or even years. If this was handled negligently (either from the beginning, or over time as changes were reasonably required) your recent investment losses may have been caused by prior negligence.

What about the investments in question?

On the issue of concentration, this could be in a particular position, a particular product, asset class, market sector or industry. It can also be the result of the original recommendations, or it can develop in your portfolio over time.

The concentration risk exposure is often a source of damages that are the subject of investment loss recovery claims. As an investor’s portfolio becomes too risky when it is or has been concentrated or overconcentrated. In times of low market volatility or positive overall market performance this type of negligence or impropriety can easily be masked or covered.

Perhaps there are some losses, but they are ignored, or don’t appear problematic as they are not as significant as they could have been to an average retail investor. Now, the losses may have been greatly magnified in a more volatile down or crashing market. Had the financial advisor not committed malpractice, not been negligent, and had he/she properly structured your portfolio, the downturn or losses may have been less had the portfolio been properly allocated (or re-allocated over time).

When our team is investigating potential liability for investment losses, we look closely at the details related to the manner in which the overall portfolio is structured as well.

Did the original strategy fall in line with the stated investment objectives, the client’s risk tolerance?

Did anything change over time?

How has it been managed over the years?

Typically, we can include damages for any negligence or impropriety as far back as 6 years from the filing date, but we also do not underestimate the value of the events that go back further as they may help us demonstrate a pattern in your case, or there might be purchases outside of 6 years that were the subject of ongoing advice and recommendations within the 6 years, even if the recommendation was to “hold.”

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Are you a victim of investment fraud? Contact Haselkorn & Thibaut at 1 888-628-5590 or visit for a free consultation on recovering your loses.

How long do I have to file a claim?

The 6 year window may be important if damages stretch back beyond that time frame, but every case is different. In approaching longer-term professional relationships with financial advisors, some basic questions as we investigate years back: are you the same person (and investor) that you were 6 years ago? Aside from your age, have any of the above factors changed?

Is preservation of capital more important to you now that it was 6 years ago? What about your need for liquidity? Were you willing to take more risk 6 years ago than you are now?

Have you or your spouse retired in the past 6 years – did your financial advisor help you plan for that change? Have you lost a spouse of loved and did that impact the management of your portfolio?

Have there been any significant health related issues/concerns and have they been considered in the management of your portfolio?

Are you a child or becoming the trusted caretaker for an elderly parent, who is just learning that all of the above criteria have been neglected for years?

What about my relationship with my financial advisor?

We also investigate the nature of the professional relationship between you and your financial advisor. Some 20+ years ago most financial advisors were content to hold a title of a stockbroker. They called you and recommended that you purchase or sell a stock.

If you wanted financial planning, you went to a financial planner separately, not your stockbroker. Today, your financial advisor rarely is content to act in a limited professional capacity as a stockbroker, nor do you or most other investors rely on them solely for recommendations to purchase and sell securities.

The trend over the past 20 years has been, whether charging fees or commissions, to provide a broader scope of professional services, where financial advisors are trusted professionals who are relied upon for all kinds of financial advice.

That investment advice is not limited in scope to purchases or sales, but rather includes ongoing advice and monitoring, and further stretches into advice on financial planning, retirement planning, insurance and loan products, working with your other trusted professionals in order to be consistent in other tax planning, estate planning, etc.

So what might grab your attention today are the current market and world events that are grabbing headlines, and what might cause you immediate concern are losses incurred in the first quarter of 2020, our investigation into potential financial advisor malpractice may very well go back many years ago, even to the original construct of the portfolio.

How extensive is the investment loss investigation?

To say that our team leaves no stone unturned is an understatement. Our team includes experienced attorneys and paralegals, some of whom have worked for years inside the financial services industry, and who have defended these exact same type of claims.

We are not only thorough in our investigation, we also can anticipate the defenses and plan around them from the very outset of a case. Our initial intake also includes a careful examination of your account statements and other documentation (including any letters, emails, text messages, voice mails, etc.).

In that review, one example of what we are looking at includes the type of products that your financial advisor was/is recommending. Many times our clients do not know or can’t explain what they own or why they own it. For example, some clients may have a series of stocks, corporate bonds, high yield (or junk) bonds, structured products, and Master Limited Partnerships (MLPs) that are in one way or another linked directly or indirectly to the price of “oil” or companies with their own performance connected to same.

With the energy industry underperforming and historic low prices for oil, many of these products were complex or risky securities that were not properly represented to investors at the point of sale. The problem was created long ago, but the losses now are merely the proverbial chicken coming home to roost. Many clients have no idea why they own so many commodity-sensitive securities, other than the fact that they trusted their financial advisor and followed his/her recommendations without question.

We have similar discussions with clients who own structured products that feature “optimization,” “triggers,” “targets,” “principal protection” and/or non-liquid private placement securities in their portfolio, such as Non-Traded Real Estate Investment Trusts (Non-Traded REITs), which are “alternative” investments. Structured products and Non-traded REITs have been designated by FINRA as “complex products,” requiring specialized training and heightened supervision over their sales to investors.

These investments also often include high-commission opportunities for the financial advisors who sell them. As a result, under the guise of satisfying a client who wanted income, a financial advisor with an undisclosed ulterior motive recommends a portfolio concentrated in structured products or other questionable securities products such as Non-Traded REITs, and it was really just the result of product-pushing and a commission grab. All of the above problems or negligence can be exacerbated by a financial advisor recommending the improper use of “margin” or “leverage.”

What about potential misrepresentations, omissions of material facts, and proper supervision?

Given the generally low interest rate environment over the past several years, traditional CD or triple-A rated bonds were not producing much of an income stream for investors. Some financial advisors recognized this and still valued the conservative secure features of these types of investments. Other financial advisors were quick to abandon traditional asset allocation models and declare “this time it’s different” while taking a more aggressive (in some cases reckless) approach.

Sometimes, this included recommendations of higher yielding (riskier) securities – some in the oil/gas/energy sector.

Other riskier recommendations included structured products and alternative assets, many of which were not understood by investors because they were opaque, illiquid or perhaps even fraudulent. As investments in companies with weak balance sheets, or over exposure to certain volatile industries are exposed in times of greater market volatility, these issues are now laid bare, as are the losses the bad advice has caused the client.

What about financial advisors recommendations to hold?

The laws, rules and regulations that apply to financial advisors often require quite a bit from both the firm and the financial advisor. To you, a passing nod without a detailed analysis and consideration of your individual circumstances and your portfolio is not enough.

In fact, the recommendation to hold, hang in there, stay the course, or a trite repetition of “now is not the time to sell,” without accounting for your specific goals, objectives, risk tolerance, liquidity needs, is all but improper.

While the advice to “hold” may be appropriate for some, it may be entirely inappropriate for others depending their specific situation, and their specific portfolio. The off-the-cuff just sit tight, just hold for now or “stay the course” recommendations may have been made the last couple of weeks by a financial advisor who was ill-prepared to address your situation, and the real question for us is to consider what exactly is that advice based upon? What are your specific needs and objectives – are they being adequately considered?

What should investors do to get started?

If you have a gut feeling something was not right, or maybe something was a little bit off and you can’t put your finger on it – call our office. We will do the work for you. We do not provide investment advice, but if there are any issues, we will identify them for you and immediately prepare a strategy to help you recover your investment losses.

Call today 888-628-5590 and schedule a free case evaluation. We can help you navigate these issues and answer your questions. If there are problems that we detect, we will present you with a strategy to maximize your recovery of any losses. What do you have to lose at this point? Worst case is you find out that your financial advisor deserves the trust and confidence you have placed in him/her and that you have been in good hands all along.

If you are an investor that has experienced investment losses (realized or unrealized) or you have questions regarding your investment accounts you should consider your potential options for recovering your investment losses.

At least one option for some investors includes a Financial Regulatory Authority (FINRA) customer dispute. The customer dispute process at FINRA is private, and quicker and more efficient that traditional court litigation. In addition, there are typically no depositions, as it is almost entirely paper-based discovery. You should contact experienced attorneys who might be able to assist you with these types of disputes.

About Haselkorn & Thibaut, P.A.

Haselkorn and Thibaut, P.A. is a nationwide law firm specializing in handling investment fraud and securities arbitration cases. The two founding partners have nearly 45 years of legal experience.

Haselkorn & Thibaut, P.A. has filed numerous (private arbitration) customer disputes with FINRA for customers like you who have suffered investment losses relating to issues similar to those matters mentioned above. There are typically no depositions involved, and those cases are typically handled on contingency with no recovery, no fee terms.

The experienced attorneys at Haselkorn & Thibaut, P.A. are available for a free consultation as a public service. Call today for more information at 1-888-628-5590 or visit our website and email us from there at

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