Unsuitable Portfolio Allocation Advice During
Coronavirus (COVID-19) Pandemic
Why Would Investors have a Claim to Recover Investment Losses from Unsuitable Investment Advice during Coronavirus (COVID-19) Pandemic?
Each customer should have its own specific determination of suitability based on its particular circumstances. For these reasons the securities industry established the “know your customer” rule to govern investment recommendations. The Financial Industry Regulatory Authority (FINRA”) “know-your-customer” Rule begins with the opening of the customer account and the requirement to gather through “reasonable due diligence” all of the “essential facts” concerning every customer of the brokerage firm.
What Factors Are Considered in a Claim for Damages from Unsuitable Investment Advice to Recover Investment Losses sustained during the Coronavirus Pandemic?
FINRA established a “suitability” rule which requires brokerage firms and its financial advisors to have a “reasonable basis” for recommending investments or investment strategies, as suitable based on a customer’s investment profile. The rule requires the financial advisor to conduct a “reasonable diligence” to answer basic questions about who the client is as an investor. The brokerage firm and financial advisor is charged to gather all necessary information to formulate a basis for recommendations based on the investor risk tolerance investment profile
Klayman Toskes Can Help Recover Investment Losses
Klayman Toskes has been dedicated to the protection of investor rights for decades, from the Tech Bubble in 2000 to the Mortgage Crisis in 2008, we can help you recover investment losses during the Coronavirus (COVID-19) pandemic. Klayman Toskes is investigating specific types of unsuitable portfolio allocations which resulted in investment losses suffered during the Coronavirus (COVID-19) pandemic that are related to the following types of unsuitable recommendations:
- unsuitable allocation between stocks, bonds and cash;
- unsuitable recommendations in MLPs invested in Oil and Gas pipelines;
- unsuitable recommendations in Real Estate Investment Trusts (REITs);
- unsuitable recommendations in Market-Linked Notes;
- unsuitable recommendations in Leveraged Closed-End Funds;
- unsuitable recommendations in Non-Traded Securities and Private Placements.