by Brian Mahany
A retired pilot was awarded $2.7 million by the Financial Industry Regulatory Authority in a suitability case filed against American Investors and Dunham & Associates Investment Counsel. The retired pilot, Andrew Michalak, filed a FINRA arbitration claim against his broker and adviser after investing in a non-public mortgage fund.
Michalak had relied on advice from his stockbroker when investing in the mortgage fund. He was retired when he made the investment and was relying on his investment to carry he and his wife through retirement. Mr. Michalak is in his 70’s.
Non-public mortgage funds are often not liquid meaning it is difficult to pull money out. The fund he invested in suspended redemptions two years ago meaning that one simply can’t get their money when they need it. The arbitration panel found that the broker never explained that when recommending the investment.
Stockbrokers have a duty to understand their customers needs and only make recommendations consistent with their needs and risk tolerance. Most retired couples in their 70’s, for example, should not be told to invest in illiquid, non-public funds. This is especially true when the investment is needed to fund day-to-day living expenses.
Although stockbrokers and investment advisers can’t guarantee an investment will go up in value, they still must exercise due diligence when making recommendations. Industry “know your customer” and “suitability” rules are part of a broker’s responsibility.
If you lost money because of the negligence or bad advice of a stockbroker, you may have a claim. Contact an attorney qualified to handle securities fraud cases and FINRA arbitrations (most of these claims are resolved through binding arbitration.)
Mahany & Ertl is a boutique law firm concentrating in investment fraud cases. Our securities lawyers can help you recover your lost investment. Often cases can be handled on a contingent fee basis meaning no legal fees unless we win your case. Contact Brian Mahany today at (414) 704-6731 for a no nonsense evaluation of your case.
Mahany & Ertl, LLC. Milwaukee, Wisconsin; Detroit, Michigan & Portland, Maine