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Can I Try To Get My Money Back?

What To Do If You Suspect Your Account Has Been Mishandled.

by Kenneth Honeywell

No investment is without risk – and people shouldn't be shocked if they lose money when they invest. But there's a big difference between normal investment losses, and losses that occur because of broker or advisor misconduct.

Each year, hundreds of thousands of investors fall victim to advisors who mishandle their money – and, in some cases, perpetrate outright fraud. Sadly, only a small percentage of these injustices are actually reported.

How Can You Know If Your Account Has Been Mishandled By An Investment Advisor?

First, you have to understand that just because you lost money doesn't mean your advisor has done anything improper. The issue is not whether you have experienced losses, but whether the investment your advisor recommended was appropriate for someone of your age, with your income and assets, and your ability to assume risk. For example, relatively risky investments such as certain limited partnerships may appropriately constitute a portion of your portfolio. However, you might have a case against a broker who, for personal gain, overloads your portfolio with risky investments.

But you'll have to remember that each case is unique: what may be bad investment advice for you, might be perfectly acceptable for a different type of investor. There are no hard-and-fast rules, and every case must be decided on its own merits.

To learn more about the “red flags” that could indicate wrongdoing in a broker/client relationship, see our advice in “Is my money being handled wrong? How to spot red flags on your investment account.”

And If You Suspect Your Account Really Is Being Mishandled, Take These Steps Right Away:

Gather the information. Document all the facts about the investment you think has been mishandled. What exactly did your advisor recommend, and when did she recommend it? What is the history of the investment? The more information you have, the clearer the case against your advisor – or lack thereof – will be. You should also try, to the best of your ability, to recreate your conversations, including phone conversations, with your advisor. The better you remember the exact advice you received, the more an attorney will be able to help with your case.

Scrutinize your other investments. You want to take stock of your other investments, even the ones you think have performed well, for two reasons. For one, you may have been getting questionable advice on these investments, as well; in other words, your investments may reveal a pattern of misconduct. On the other hand, your other investments may help clarify your advisor's recommendations. It's certainly possible that your “bad investment” was the result of an investment strategy you agreed to and even encouraged.

Call Maddox Hargett & Caruso, P.C. We'll work with you to get to the bottom of your case and determine whether your advisor has engaged in professional misconduct. Expect us to ask a series of questions that will help us evaluate your unique circumstances – and please note that your initial consultation with us is free. Our fees are based on a percentage of funds we recover on your behalf. If we don't recover any funds – or if we determine there has not been any misconduct on the part of your investment advisor – you don't owe us a legal fee.

Continue to monitor your investments. At Maddox Hargett & Caruso, we're committed to working quickly and diligently on your behalf. But that doesn't mean you should stop being diligent yourself. Continue paying close attention to investment performance, especially now, when we are trying to determine whether or not your advisor has mishandled your account.

For a first-hand account from an investor who won a settlement for broker misconduct, see “What's it like to arbitrate?” in this issue.

And, when in doubt, ask us. We've represented more than 1000 investors in cases of broker negligence, fraud or misconduct. We'll help you find the answers, because we're dedicated to fighting investment misconduct wherever we find it.

Reach us at 800-505-5515, or email us.


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