by Brian Mahany
The headline in today’s Wall Street Journal reads “Insider – Trading Probe Widens.” Further down on the front page in smaller type is an article titled, “For Many Financial Advisers, Stocks Become A Hard Sell.” Is it any wonder why?
While the Dow Jones Industrial Average is sitting at 13,200 this morning, many individual investors have simply left the market leaving institutional investors in their place. We are not surprised.
If the market “correction” (we call it a crash) of 2007 wasn’t enough to scare off investors, repeated stories of corporate corruption, insider trading, investment fraud and the impending fiscal cliff will.
While we believe the market still offers wonderful opportunities, the SEC and federal prosecutors haven’t done enough to keep the market honest. While institutional investors will come back after a bad experience, many individual investors will not.
Unfortunately, many individual investors fail to realize that they may have a good cause of action against their broker, investment adviser, third parties involved in the transaction, audit firms and the like. Although we live in a society where no one seems to take responsibility for their actions, there are still options.
Sometimes the money is truly just gone and the only person to blame is headed to prison. That doesn’t get you back your money but in most cases, we have found there are deep pockets who also bear some responsibility.
We often represent investors in suits against stockbrokers and real estate agents (Real estate agents often sell investments in tenant in common schemes called TICs). Does this mean every investment advisor, stockbroker, registered rep or real estate agent is responsible when an investment goes south? Of course not, but these professionals do have a duty to perform some due diligence on the investments they recommend. Ditto for the Big 4 audit firms who frequently audit these investments.
Four years ago, the Bernie Madoff scandal was the headline in every newspaper worldwide. While the memory of that tragedy has faded for most people, the victims continue to suffer (we represent several). During this holiday season we hope that you remember to perform your own due diligence before you invest. Make sure you have a good adviser – and one backed by a large organization or good insurance in case mistakes are made. If you still find yourself in trouble, give us a call.
Our goal as lawyers is simple. Mahany & Ertl hopes to be the best fraud recovery and tax law firm anywhere. We hope you never need us but we are ready to help.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Portland, Maine and Minneapolis, Minnesota.