Investment Advisory Service Accused of Breach in Fiduciary Duty


Investment Expert WitnessThis case involves an individual who suffered significant equity losses due to allegedly negligent capital market investment advice provided by the defendant firm. The plaintiff in Nevada initially established various securities accounts with the defendants. The plaintiff also established a discretionary, managed investment account with another firm and relied upon the defendants for investment advice and recommendations. The plaintiff consulted with the defendants and relied on their advice and investment recommendations, including development of a financial plan for which the plaintiffs paid a fee. The defendants expressed their abilities with respect to personalized investment advice and financial planning, including disclosures on various websites, as well as in written brochures. The plaintiffs relied upon the defendant’s representatives concerning its abilities, expertise, and recommendations. The defendant firm also created a customized financial plan for the plaintiff. This financial plan was based upon the defendant’s analysis of finances and other requested disclosures by the plaintiffs. Respondents requested detailed information about plaintiffs, and they complied with such requirements. Nevertheless, the plaintiffs suffered significant losses resulting from the financial crisis and market collapse. It was alleged that the defendants did not develop or recommend a strategy that would protect the plaintiff from further equity losses.

Question(s) For Expert Witness

  • 1. Do you extensive knowledge in determining a breach in fiduciary duty?
  • 2. Please explain your experience working on investment adviser/fiduciary duty related cases?

Expert Witness Response E-009408

Expert-ID: E-009408

I have extensive knowledge in the duties of financial managers, and am well aware of how these duties may be breached. I have spent more than 25 years in the financial sector and believe I am very well qualified to review this matter. I am FINRA Series 66 and 79 certified. I wonder if the financial managers in this case were consistent in speaking with the investors regarding their strategy? A financial manager should be continuously communicating with his clients as to their desired investment strategy (aggressive, conservative, or some balance of the two.) Their clients should always be made aware of the performance of their funds and constantly asked if they are still comfortable with their fund management. It seems that this did not take place, which might very well represent a breach of fiduciary duty.

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