A market crash exposes investment scams and Ponzi schemes, causes illiquid and high-risk investments to fail, amplifies losses due to margin trading and leverage, and causes catastrophic losses to concentrated positions in a single company or sector affected by the crash. If your portfolio has suffered inexplicable or catastrophic losses, please call us for a case evaluation.
If you are an investor who lost money during the recent COVID-19 crash, loss recovery may be an option. If your losses were caused by or exacerbated by broker or financial adviser misconduct at a full-service brokerage, such as unsuitable investment recommendations; over-concentration; use of margin trading and leverage; or investments in complex products inconsistent with your investment objectives, risk tolerance, or time horizon, it is worth your time to discuss with experienced, knowledgeable counsel what your options are to recover your losses.
As an experienced FINRA arbitration firm, The Law Offices of Jonathan W. Evans & Associates ((800) 699-1881) is here to help investors who have been harmed by the market crash due to full-service brokerage misdeeds, such as unsuitable recommendations to invest in excessively risky products, breach of fiduciary duty, lack of supervision, and negligence.
We previously wrote that stock market declines tend to expose outright fraud and risky strategies alike. To read more about this, visit our article, Coronavirus Losses, Stock Market Decline Expose Fraudulent Schemes.
In our article Margin Trading and Complex Leveraged Products Could Amplify Losses During Coronavirus Commotion, we found that investors who were improperly sold complex products or who invested via margin may have been inappropriately harmed by brokers who failed to appropriately apply industry rules and policies regarding suitability.
Such conservative, moderate, or what are known as "unsophisticated" investors may be entitled to financial remediation for their brokers' misconduct if said brokers solicited investments not compatible with risk-averse investor profiles or objectives.
In plain English, if you said you didn't want risk and your broker nonetheless exposed your portfolio to excessive risk, which in turn exacerbated your investment losses, you may be entitled to recovery through FINRA arbitration.
Others, such as variable annuities, have been on FINRA's investor-abuse radar for years—even prior to the coronavirus meltdown.
Another example of ill-suited investments is over-concentration wherein a broker recommends a disproportionate or excessive amount of shares or positions in one securities product or sector, such as the oil and gas industry which has also experienced its own COVID-crash.
Rules and regulations establish limits on concentration and a broker or full-service firm responsible for over-concentrating a customer's portfolio in one product may be liable for damages incurred when that over-concentrated position fails. For more information about concentration, visit our article, Excess Concentration Can Prove Disastrous During Economic Downturn.
Additional risky and potentially unsuitable products our attorneys have reviewed in the wake of COVID-19's crash include exchange-traded products (Exchange-Traded Notes At Heightened Risk Due to COVID-19's Market Volatility), structured products and so-called RevCons (Corona Virus Plagues Risky Structured Products, Reverse Convertibles), and securities-based loans (The Securities-Based Loan Margin Call Is "Exactly The Risk We Are Focused On," Says FINRA).
Lastly, elderly customers who depend on investment income in retirement who suffered disproportionate losses during the corona crash may have been the victims of unsuitable recommendations or similar misconduct ranging from breach of fiduciary duty to fraud. If this has happened to you or a loved one, you may be entitled to damages. Call the Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for a consultation.