As tax season approaches and you begin to review your financial/investment records, we encourage you to be on the lookout for financial negligence or fraud. Because the overall market has performed well over the past several years, a great deal of investor losses and broker misconduct may have gone undetected.
Even though the overall stock market declined by over 10% last year, the market has performed very well since the market collapse in 2008-2009. For example, over the last 8 years, the S&P 500 (a stock market index based on the market capitalization of 500 large companies with stock listed on the NYSE or NASDAQ) has generated a return of approximately 152.033% (with dividends reinvested). That is an annualized return of roughly 10.817%. See https://dqydj.com/sp-500-return-calculator/. This means that the assets that an investor has had invested in equities (stocks) should have more than doubled over this period. For example, if an investor invested $100,000 in equities in December 2009, he or she should have over $250,000 today (even accounting for the declines suffered in 2018).
Even if your overall account balance has gone “up,” you may still have suffered financial damages. If you or your clients have not seen returns like those referenced above, it could be due to negligence or other misconduct on the part of the broker. There could be several reasons why an investor is not experiencing returns similar to the overall market. Some of these may include: excessive and unnecessary trading, overconcentration in one stock or in one sector of the market (such as having all oil & gas investments), the sale of unsuitable investments, the sale of high commission products, the sale of a flawed product, misappropriation, or outright fraud.
You may also be holding illiquid investments in your individual retirement accounts that you cannot sell and are, therefore, unable to meet the required minimum distributions (RMDs) imposed by the IRS or otherwise access your investment funds for your retirement needs. These types of investments may include non-traded REITs (or other real estate related investments), promissory note programs, or investments in private start-up companies. If so, you may have financial losses.
If you believe that you or your clients may have suffered financial losses due to the misconduct of a financial professional, we may be able to help. Fishman Haygood represents investors who have suffered investment losses in FINRA arbitrations and in state and federal courts across the country. We would be happy to meet with you and analyze your specific situation, free of charge, and provide you with our opinion as to whether you have a viable claim. Contact Fishman Haygood today.