Skip to Main Content
SUBMIT A TIP RECEIVE DAILY NEWS
Menu AdvisorHub
  • News
      • Latest News
          • Advisor HeadcountWirehouses: Just Say No to Disclosing Broker Headcounts
          • Age discrimination47-Year Industry Veteran Targets Wells with Age-Bias Claim
          • Stifel Chief Executive Ronald KruszewskiStifel Bumps CEO Pay 15% to $11.5 Million
          • Bank of America Chairman and Chief Executive Brian MoynihanBofA Open to “Rethink” of Crypto Investing Ban: CEO
        • Close
      • Advisor Moves
          • Doris Neyra, Melissa Van Putten-Henderson and Gina Jamurath moved to UBS's private wealth business in Miami from Wells Fargo's private bank.UBS Lands $14-Mln Team from Wells Private Bank in Miami
          • Merrill Lynch Exterior Sign and LogoMerrill Recruits Citi Private Banker in SF, Loses Teams to Janney, Sanctuary
          • Advisor movesFirst Republic Hires $4.6-Mln Morgan Stanley Team in NYC
          • Financial Advisors LeavingRockefeller Lures $2.2-Million Merrill Team in Michigan
        • Close
      • Enforcement
          • Advisor FraudSEC Charges RIA with Pro Athlete Niche for Ripping Off Clients
          • advisor-diy-tools-772×485Ex-Jones Broker Suspended for Attempting DIY Settlement with Client
          • Advisor GuiltyEx-Merrill Broker in Chicago Pleads Guilty to $3-Mln Fraud
          • J.P. MorganFinra Fines, Suspends Ex-J.P. Morgan Broker Fired over Unauthorized Trades
        • Close
      • Markets
        • `Nothing Safer Than Cash’: Tech Rout Puts Silicon Valley on Edge
        • ‘Any News Is Bad News’ as Earnings Fail to Save Equity Bulls
        • ‘50 Cent’ Profited From Volatility Jump, Wells Fargo Says
        • ‘Beaten Down’ ETF Is a Way to Play Inverted Curve, BofA Says
        • Close
      • Opinion
          • TRO-772×485Sirianni: Toxic Culture
          • Opinion-How-Will-The-Coronavirus-Affect-The-Stock-Market-Opinion: Coronavirus – What Advisors Need to Know
          • opinion-investors-conquered-fees-next-up-is-their-own-behaviorOpinion: Investors Conquered Fees but Not Their Own Behavior
          • Investor-Confidence-In-Stocks-Rightly-Declines-Opinion-772x485Investor Confidence in Stocks Rightly Declines: Opinion
        • Close
      • Fintech News
          • Fintech Cryptocurrency ClearingFintech Firm Apex Clearing Agrees to Go Public Via SPAC
          • System outageMerrill Systems Hiccuped on Thursday as Stocks Slid
          • 7 dollar rolls‘The Rock’ Invests in Finance App Acorns, and New Users Get $7
          • TraderHigh-Frequency Traders Love Business With Robinhood
        • Close
      • From the Publisher
          • TRO-772×485Sirianni: Toxic Culture
          • Welcome to AdvisorHub RIA-772×485Welcome to AdvisorHub RIA
          • 2021 PredictionsFrom the Publisher: Sirianni’s Predictions for 2021
          • Josh Rogers – 772×485Seven Questions with Tony Sirianni: Josh Rogers, Founder and CEO, Arete Wealth
          • Phil Hildebrandt — 772×485Seven Questions with Tony Sirianni: Phil Hildebrandt, Principal, CEO of Segall Bryant & Hamill
          • Christian Hyldahl, President of Varium Investment Partners-772×485An AdvisorHub Interview with Christian Hyldahl, President of Varium Investment Partners
          • John Peluso – 772×485Timely interview with John Peluso and AdvisorHub CEO Tony Sirianni
          • Louis Dworsky Coronacrash Interview-772×485Coronacrash Update: Hayden Royal’s Louis Dworsky & Tony Sirianni
        • Close
    • Close
  • Deals & Comp
  • Recruiting Wire
  • Breakaway Center
  • Resources
    • resources-home-menuResources Home
    • PRACTICE MANAGEMENT RESOURCESPractice Management Resources
    • Transition ResourcesTransition Resources
    • Fintech ResourcesFintech Resources
    • menu fintechFintech Product Directory
    • Menu-Institute-772×485Institute
    • Boutique Wealth AdvisorsBoutique
    • EventsEvents
    • Close
  • AdvisorHub TV
  • Podcasts
  • RIA Center
  • Asset Manager Hub
  • Virtual Summit
close X
March 11, 2020

Investor Lawyers Gear Up Amid Market Rout

by Mason Braswell
|
News
|
Comments (5)
Share This
SUBMIT A TIP
investor-lawyers-gear-up-amid-market-rout-
Maskot/Getty Images

As losses in the stock market mount, plaintiffs’ lawyers are eyeing opportunity.

“It is easy to conclude that all losses were due to coronavirus pandemic fears, that they were out of anyone’s control,” New York-based lawyer Jacob Zamansky posted on his site on Tuesday. “But dig a little deeper and it turns out that, in many instances, broker misconduct was really to blame for an individual investor’s losses.”

Few plaintiffs or defense lawyers expect complaints to quickly flood into the Financial Industry Regulatory Authority’s dispute resolution forum or other venues. The extent of losses may not be apparent to investors for three to six months, they said, and plaintiffs’ lawyers will then have to analyze portfolios and underlying claims of unsuitability to triage the ones most appropriate for litigation.

“There are a lot of lawyers who are kind of excited about this, and think there are going to be a slew of claims filed,” said Andrew Stoltmann, a Chicago-based lawyer and former president of PIABA, the bar association for plaintiffs’ lawyers. “There will be—if this market stays down for three months.”

He said he has not fielded calls from investors in the immediate aftermath of the past week’s market carnage.

The S&P 500, Dow Jones Industrial Average and Nasdaq Composite were down by more than 4% in early afternoon trading from Tuesday’s close, and are each off more than 17% from recent highs.

Lawyers, however, are examining whether the extraordinary volatility of recent weeks can support some quick-hit  breach-of-contract and other trust-violation claims against brokers. The average daily movement of the indexes have exploded from under 1% in all of 2019 to ranges above 3% in the past 13 days.

“I’m seeing clients getting killed with volatility who were overweight in stocks or on margin,” Zamansky said. “We’re going to be filing some complaints in the next couple weeks.”

Jeffrey Sonn, a lawyer in Aventura, Florida, said he is watching oil-and-gas investments vulnerable to the Saudi Arabia/Russia supply contretemps that broke over the weekend and travel-industry stocks hard-hit by the coronavirus crash.

“We’re definitely seeing an uptick in investors who are waking up to the fact that their advisor did not sufficiently diversify them,” Sonn said.

Customer arbitration complaints filed with Finra plummeted by 55% from 5,246 in 2009 to 2,363 last year, a Finra spokeswoman said. The bull market that followed the 2008 financial crisis began in March 2009.

The downward trend continued this January. Customer claims plunged 9% to 160 from 176 that were filed in January 2019, according to Finra’s dispute resolution site.

But customer claims have been yielding a higher percentage of awards. Forty-eight percent of arbitration decisions rendered this January resulted in damage payments to customers, compared with 45%, 40% and 43% respectively in the three preceding years.

Stoltmann said he expects to see cases tied to over-concentration and suitability as some brokers may have been lulled into boosting customers’ investments stocks or structured products amid a rising market.

Like this article? Let AdvisorHub come to you!  Sign up

Share This
Comments (5)
  • on Mar 11 2020, IChooseAnonymity says:

    Bring on the litigation!

    > Reply to IChooseAnonymity
  • on Mar 11 2020, SayItIsntSo says:

    So the Pit Bulls are suiting up for battle? Who’d have thought such a thing.

    > Reply to SayItIsntSo
  • on Mar 12 2020, Advisor who cares says:

    Here come the ambulance chasers! These clowns sit around waiting for markets to turn negative and then they know exactly how to play the game to force settlements out of the firms even if they are completely meritless allegations. The sad part is the advisor gets stuck with the disclosure for life a rarely has any say in the settlement discussions. The system is so broken and these attorneys are a big reason why it doesn’t work. How about FINRa makes the firms carry settlements on their CRD record when a settlement is negotiated. Stop making the advisor the “fall guy”. That would change the game overnight.

    > Reply to Advisor who cares
    • on Mar 12 2020, SayItIsntSo says:

      In a perfect world, your idea to fix this problem has merit. But in my perfect world, I’d rather just get rid of all the ambulance chasers – or better yet, make them have skin in the game. They sue and lose, they pony up the amount they sued for. They’d think twice about all these frivolous lawsuits.

      > Reply to SayItIsntSo
  • on Sep 15 2020, Victoria I Lapoint says:

    The sad part is the advisor gets stuck with the disclosure for life a rarely has any say in the settlement discussions. The system is so broken and these attorneys are a big reason why it doesn’t work. How about FINRa makes the firms carry settlements on their CRD record when a settlement is negotiated. Stop making the advisor the “fall guy”. That would change the game overnight.I also learn Something New From Your Post And Next Time I Will Try To On My Financial Method. Thank Again For Sharing Awesome Tips.

    > Reply to Victoria I Lapoint

Leave a Reply Cancel reply

Tony Sirianni Podcast Banner

CORONACRASH NEWS

  • Stifel Bumps CEO Pay 15% to $11.5 Million

    Stifel Bumps CEO Pay 15% to $11.5 Million

    Apr 20, 2021
  • Fed to End Covid-19 Capital Break It Gave Wall Street Banks

    Fed to End Covid-19 Capital Break It Gave Wall Street Banks

    Mar 19, 2021
  • Credit Suisse Replaces U.S. Exec, Halts Bonuses as Clients Fume

    Credit Suisse Replaces U.S. Exec, Halts Bonuses as Clients Fume

    Mar 18, 2021
  • Firing of Billion-Dollar Broker Sends Warning on Work-from-Home Compliance

    Firing of Billion-Dollar Broker Sends Warning on Work-from-Home Compliance

    Mar 12, 2021
  • Big U.S. Banks’ Vows to Halt Job Cuts End as Virus Endures

    Big U.S. Banks’ Vows to Halt Job Cuts End as Virus Endures

    Feb 26, 2021

NEWS

  • Wirehouses: Just Say No to Disclosing Broker Headcounts

    Wirehouses: Just Say No to Disclosing Broker Headcounts

    Apr 21, 2021
  • 47-Year Industry Veteran Targets Wells with Age-Bias Claim

    47-Year Industry Veteran Targets Wells with Age-Bias Claim

    Apr 21, 2021
  • Stifel Bumps CEO Pay 15% to $11.5 Million

    Stifel Bumps CEO Pay 15% to $11.5 Million

    Apr 20, 2021
  • BofA Open to “Rethink” of Crypto Investing Ban: CEO

    BofA Open to “Rethink” of Crypto Investing Ban: CEO

    Apr 20, 2021
  • UBS Lands $14-Mln Team from Wells Private Bank in Miami

    UBS Lands $14-Mln Team from Wells Private Bank in Miami

    Apr 20, 2021

Recruiting Winners: 2020 Year in Review

FINANCIAL INDUSTRY PODCASTS

AllIndependence
The must listen-to podcast for financial advisors by Tony Sirianni. Guests to include:
-Ron Kruszewski
-Shirl Penney
-Penny Pennington
-Eric Clarke
and many more
Incisive conversations focused on helping investors navigate the ever-changing global market landscape
Michael Kitces and Carl Richards discuss financial advising topics.
The “new advice value stack,” and how firms can use it to help maximize their own value propositions for their clients.
Interviews and insights for advisors curious about switching to a new broker dealer.
The Brighthouse Financial Insights Panel is a group of leading, independent experts providing powerful insights into the big challenges facing you and your clients.
Powering Independence Podcast, insights and ideas for RIAs, presented by Dynasty Financial Partners. A podcast dedicated to presenting fresh ideas and best practices for the wealth management industry.
As an industry expert, Frank LaRosa provides guidance and advice on a host of topics from recruiting and transitions, succession planning, practice management, M&A and more.
Our goal is to unlock the challenges to reveal the opportunities and what it means to provide advice in the 21st century.
Go behind the scenes with registered investment advisors and other related independent business model experts
As a nationally recognized recruiter and consultant to financial advisors, Mindy Diamond has unmatched experience in introducing advisors to the independent space.
The must listen-to podcast for investors, venture capitalists and financial advisors, with Tony Sirianni and Paul Dietrich.
An Introduction to Independence: 5 Key Episodes to Jumpstart Your Knowledgebase
Jay is an investment strategist, CERTIFIED FINANCIAL PLANNER™ and business consultant to financial advisors.
We interview top financial advisors and visionary voices to bring you the strategies, tips, and tools you need to make a difference in people’s lives.
A financial literacy and commentary show that features a number of investors, financial experts, professional athletes, business owners and more.
Join Sound Financial Group CEO Paul Adams and President Cory Shepherd every week, as they help you Design and Build a Good Life™.
The Kuderna Podcast, focusing on wealth in it's original meaning- a state of well being.
Timeless wisdom, actionable information you can use right now to make smarter investment decisions.
Made for and dedicated to those folks serious about their financial plan.
Suzanne Siracuse asks the questions nobody else asks, as influencers and interviewer collide in her new and truly unique podcast series The Big Reveal.
Our webcast is dedicated to helping our viewers get real insights by avoiding the cognitive dissonance of today’s media outlets and biased editorial filters.

Latest News 
Advisor Moves 
Enforcement 
Opinion 
  • About Us
  • Contact Us
  • Advertise
  • Events
  • Careers

 get our newsletter

Industry focused content and breaking news.

SIGN UP

Contact Us

EMAIL US
1707 Post Oak Blvd.
#484
Houston, TX 77056

© 2021 AdvisorHub
  • |Terms of Use
  • |Privacy Policy
  • |Advertise
  • |Careers
  • Facebook
  • Linkedin
  • Twitter

Back to top