On the fence about arbitration.

July 4, 2009 7:49 AM

I've lost some funds due to misrepresentation by a securities dealer. I'm thinking of litigation, but I'm not sure I'm old enough.

The dealer has come under fire recently for concealing the fact that one of its corporate bond funds included toxic waste assets--mortgage backed securities. People have been filing arbitration claims, and receiving their lost funds as an award.

However, looking over the successful cases, it appears that most investors are in their 70s or 80s--thirty or forty years older than me. It looks like the loss of money during retirement might be swaying the FINRA arbitrators into deciding for the plaintiff in these cases.

Based on fraud, I believe my situation is ironclad, but I'm not sure if I should worry about the age factor. I know you're not a lawyer or my lawyer, and that I should pursue legal advice (and am doing so as we speak). But given the sympathy of the legal establishment, the media, and the government to the plight of the elderly in during this economic crisis, will the fact that I'm in my forties weigh against me? Will the arbitrators say, "you're old enough to earn it back--unlike a retiree of advanced years?"

posted by Gordion Knott to work & money (3 comments total)

I've lost some funds due to misrepresentation by a securities dealer.

I don't think the sympathy is as limited as it seems to just the elderly - I think those tend to make better stories, pull the reader/viewer's sympathy card. Call it the "missing attractive white teenage female" syndrome of the current financial scandals? It's not a perfect analogy, because the elderly ARE particularly negatively affected by the loss of retirement funds.

I think you should not worry about this as much, and wait for your lawyer's advice. I think you will hear that this is not a concern.

By the way, damages are damages. In some circumstances there is a duty to mitigate - for example if you are injured and can't work a physical job, but can take a desk job in the same company, you get the difference in pay between the physical job and the desk job EVEN IF YOU CHOOSE not to take the desk job. Here, I see the situation as different - you can earn more money, sure, but the reality is, but for the fraud, you should have [the money you've invested] + [the money you earn in the future]. You are not generally responsible to earn MORE money in the future, to put yourself in the position you would have been if not for the fraud. Do you see the difference between the mitigation example, and your situation?

This isn't legal advice - these types of cases are not within my expertise - but just a general overview of the thinking of damages law. Your legal rep should be more than happy to more specifically walk you through these points.
posted by bunnycup at 8:06 AM on July 4

I'm a lawyer, but I'm not your lawyer. Securities law, (my original focus in law school)n is very, very complex. Litigation, (which I ended up doing), is very, very complex. You will not be able to get any answer here that will be of any value to you whatsoever. Fraud and securities fraud are very complex, fact-specific claims, which require a complex analysis which no layman (and few lawyers) can do. I suggest looking over the listing of these cases and seeing which firms represented the plaintiffs/complainants in these cases and contacting said firms.

Finally, there is no such thing as an "ironclad" claim. Ever.
posted by Ironmouth at 8:28 AM on July 4

There may be facts which apply to the cases of other litigants which do not apply to your individual case. It's not necessarily the case that just because someone has been found to have concealed material information from some of their clients they'll be found to have done the same with you. Would be worth checking around to see if there is any firm seeking clients to join actions against this dealer though. What you think the dealer should have disclosed and what he was required by law to disclose may be two different things (as may be what you think the standard for "disclosure" should be and what it actually is at law).
posted by Lolie at 10:32 AM on July 4