Sometimes, people think that an investor is someone with a lot of money at his or her disposal but often investors are just regular people who consistently contribute to their investment account each month, hoping it will grow for the future.
Investor claims
When an investor’s account loses money, he or she may want to file a claim against the investment company or broker who managed the funds. However, the investor must demonstrate more than just that the account lost money. The loss must be caused by a direct action by the broker or investment company.
There are usually three causes of action. These are called unsuitability, churning and negligence.
Unsuitability means that the investor’s broker or advisor knew or should have known that the investment trading patterns were not consistent with the investor’s objectives. Churning means that the account was traded excessively and the broker or advisor had control over the funds to make those changes. Negligence may occur where the broker or advisor failed to adequately supervise the funds.
Class action lawsuit
When there is a group of investors that have been similarly impacted by the actions of the broker or advisor, they may choose to pursue a class action claim. A class action lawsuit can make the filing process more efficient and the decision about the outcome of the action applies to the entire group. If the group is successful, any payments are divided among the group.
If investors would like additional information about filing a class action claim and guidance about how to proceed, an experienced attorney can help.