Suing a financial advisor

[breaker]

Ours is now under ACCC investigation

 

[Investment Guy]

In your understanding, is there any recourse left? I tried one pay if you win laywer and they said ASIC was my only (slim) hope. Any thoughts?

Hello Lindsay,

I'm not sure if you're still active on this forum but, if you happen to get this, please accept my profound apologies for the delay in responding. For what it’s worth, below are my preliminary thoughts on your situation:

Firstly, I'm actually quite surprised that you found a "no win, no pay" lawyer for your case as they are actually quite rare in the field of financial services (contrast the field of personal injury claims where it is practically the norm). Most corporate lawyers who specialise in this particular area invariably act for the corporations, not the individuals.

Secondly, while I respect my fellow lawyer's opinion regarding ASIC, I regret that I do not share the same degree of faith in our corporate regulator insofar as your case is concerned. I say that for two respectful reasons based on my own experiences: (1) ASIC generally focuses on the "big fish" and is mostly unconcerned with individual situations unless there is flagrant criminal activity, as opposed to mere allegations of negligence as yours appears to involve; (2) ASIC's fundamental role is to sanction or prosecute wrongdoers, and not to recover money from them on behalf of aggrieved investors. (Yes, of course, they have been known to do that - such as the case of Westpoint - but that should be considered more the rare exception rather than the general rule.)

Thirdly, yes I do believe there is hope for you for based on the following:

(1) You appear to still be within the 6-year limitation period (as you have recognised);

(2) The fact that a company has been re-named is irrelevant - it's still the same entity from a legal perspective;

(3) Financial advisory firms have professional indemnity insurers behind them - and as long as the insurers exist, any reasonably competent lawyer should be able to negotiate some sort of a settlement for you;

(4) Even if the responsible company has been deregistered, there still remains a number of avenues for you, such as pursuing the adviser directly, or the company's directors or its officers, each of whom will allow you to indirectly seek recourse from their professional indemnity insurers (which I would imagine, for most people, would be the ultimate objective). There is also a provision in the Corporations Act that will allow you to pursue the insurer directly where a company has ceased to exist. [I cannot, of course, say if any of these courses of action is appropriate for you as I do not know your situation well enough, but these are generally the sorts of options that would be considered by any aggrieved investor and their lawyer.]

(5) An inexpensive avenue by which you can pursue a claim would be the Financial Ombudsman Service (FOS). However, for a claim such as yours, I would honestly suggest not handling it yourself as there is too much money at stake - get a legal professional to do it. Sadly I have seen far too many legitimate claims fail at FOS simply because the claimants did not know how to prepare their submissions correctly. This is not to suggest that you won't go a good job of it; I'm just saying there exists a broader range of technical considerations that can be relied upon as part of your legal arsenal to maximise prospects of success at FOS but most people would not be aware of those considerations.

It is my strong suggestion that you should immediately seek out a lawyer who specialises in this particular area (ideally with combined litigation and financial services law experience), negotiate some sort of a deferred or "no win no way" fee arrangement, and get them to advice you on your full options, prospects and strategies.

Lindsay, I hope all this helps. Apologies once again for the lengthy delay and I do wish you and your wife a good outcome with this unfortunate situation.

Regards,

-INVESTMENT GUY

 

[rossCaruso12]

This seems like such a horrible situation to be put in.

Best of Luck in your situation and I hope all things panned out well for you.