# Information about suing a financial advisor?



## indexxx (Oct 31, 2011)

My wife has a 'friend' who became an advisor (salesman) for a large insurance company. As my wife has no investment knowledge, he took over her portfolio, helped her in a few areas, etc and she trusted him as they had been friends for several years. Then a few years ago, my wife and her boyfriend at the time were encouraged by this person to borrow $100,000 each from his company and leverage it into something that he promised would make them 40% in a short timeframe, and told them 'we absolutely have to move now, before it's too late...'

Well, you can guess how that turned out. It tanked, my wife and her ex boyfriend are on the hook for the 200K plus his fees, and interest, and it's never made any return for them. And now neither of them can get a student loan, mortgage, or even open a bank account because of this huge financial albatross that has destroyed their credit rating and shows them in massive debt.

The ex boyfriend met with another advisor this week to try and get his side of things cleared up- we're waiting to hear back on what the outcome is. If we feel their has been an actionable breach, what can we do? And say we decided to go after him, do we have to pay for a lawyer?

Thank you.


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## Daniel A. (Mar 20, 2011)

You could start by contacting the governing body that the adviser is registered with and get an opinion from them.
You may agree or not with their view of the matter in which your step after that is hire a lawyer that you pay for to review things.
Civil matters are costly given their position I'd wonder where they have the money to pay the lawyer as even a good case on contingency requires money up front.

Was the promise in writing, sadly many people take poor advise out of personal greed without weighing the risk.


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## Mall Guy (Sep 14, 2011)

indexxx said:


> My wife has a 'friend' who became an advisor (salesman) for a large insurance company.


Did they sign a KYC form (Know Your Client) if they did, and the advise does not line up with their risk tolerance, very good chance of compensation


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## CadMan (Apr 16, 2010)

You may also want to check with the Securities commission in your province. Sounds like there may also have been breaches of securities rules. There's no charge to you for the Comission to investigate.


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## 44545 (Feb 14, 2012)

Read the book "The Naked Investor". Unfortunately, there may be little your friends can do, though they should try.

The red flags should have been "promised" (there are no guarantees) and "we absolutely have to move now..." (why?)

They really jumped into the bullshit feet first.


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## LondonHomes (Dec 29, 2010)

indexxx said:


> And say we decided to go after him, do we have to pay for a lawyer?


Of course you need to pay for you lawyer, nobody else will.
Your "friend" will have E&O insurance and will not need to pay for his however.


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## Cal (Jun 17, 2009)

I think the most difficult part would be finding a lawyer who has experience or specializes in this field.

Yes, you would have to pay your lawyer. However your lawsuit could contain a claim for legal fees, as if you were not unfairly mistreated or misrepresented in this matter, you would not need a lawyer in the first place.

That doesn't mean you would win your suit, or get awarded legal fees.

Good Luck and keep us updated.


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## MoneyGal (Apr 24, 2009)

Here's a relevant article from Ellen Roseman: http://www.moneyville.ca/article/760467--can-you-sue-your-adviser-for-negligence


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## dubmac (Jan 9, 2011)

Hey MoneyGal...Is that *YOUR* quote I see on page B12 under Rob Carrick's "portfolio strategy" column in todays globe and mail finance section??
I couldn't help but see the reference the individual as "co-author to the book, Pensionize your Nestegg".
Anyhow, if it is you, congrats on being selected.


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## MoneyGal (Apr 24, 2009)

Yes, that's me! BTW I know one of the other people quoted. In fact, I've known him since we were both 10 years old and shared a desk...until we had to be separated because we wouldn't stop talking to each other during class.


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## indexxx (Oct 31, 2011)

LondonHomes said:


> Of course you need to pay for you lawyer, nobody else will.
> Your "friend" will have E&O insurance and will not need to pay for his however.


Hmm- I was hoping there was a body I could report this to or something that would look into it.


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## MoneyGal (Apr 24, 2009)

Yes. There is. Depending on how this person is registered, you can report them to their licensing body. If they have multiple registrations/designations, you can report them to multiple bodies. 

You can also complain to the financial services commission in your province and territory. Here is more information on the Ontario commission: http://www.fsco.gov.on.ca/en/about/monitoring/Pages/monitoring_process.aspx

NOTE: NONE of these actions will result in any kind of restitution for your wife. Instead, they could result in the advisor being disciplined by the licensing and regulating agencies -- i.e., lose his license, pay a fine, etc. But if your wife wants financial restitution, she is going to have to sue the individual and his firm directly.


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## kcowan (Jul 1, 2010)

When I had a bailiff come to my house to repossess my used car, I showed him the bill of sale from a car dealer. He referred me to an Ontario government agency that controls dealer licensing. They eventually brought the dealer to heal by threatening to lift their dealer license. Sometimes the government works for you. They had to settle a TD loan against the vehicle. ($19k settled for $2k.)


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## indexxx (Oct 31, 2011)

MoneyGal said:


> Yes. There is. Depending on how this person is registered, you can report them to their licensing body. If they have multiple registrations/designations, you can report them to multiple bodies.
> 
> You can also complain to the financial services commission in your province and territory. Here is more information on the Ontario commission: http://www.fsco.gov.on.ca/en/about/monitoring/Pages/monitoring_process.aspx
> 
> NOTE: NONE of these actions will result in any kind of restitution for your wife. Instead, they could result in the advisor being disciplined by the licensing and regulating agencies -- i.e., lose his license, pay a fine, etc. But if your wife wants financial restitution, she is going to have to sue the individual and his firm directly.


Thanks MoneyGal, that is very useful- and thanks to all. Sticky situation, and I was not involved with her when all this was going down. It's a case of her and her BF at the time trusting someone too much, someone they knew socially beforehand, and having no financial knowledge of their own. Last year I did a bit of training at an insurance company, thinking to become an "advisor" with them- then I discovered all the shady investments they offer, and couldn't do it. They also want you to bring in your family and friends to get them on board... and I learned about E&O coverage and that (theoretically) your 'advisor' cannot get you into anything in the manner this guy did.

This is exactly why I never, ever do business with friends, unless we've become friends through good business first.


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