DOES YOUR FINANCIAL ADVISER HAVE PROFESSIONAL LIABILITY INSURANCE?
Believe it
or not, your trusted financial adviser is only human. He or she can make a very
costly mistake despite his or her best intentions. Perhaps you have taken
comfort in the fact that your adviser, whether a registered representative or
an investment adviser representative, has a company with whom they are
affiliated. Surely the company has insurance, right? Well, I have more bad news
for you – that company might not have an errors and omissions policy either,
particularly if they are a small outfit.
Our advice is that you ask to
receive a copy of your advisor’s policy at the beginning of your relationship.
If your...
CAN A FINANCIAL ADVISER BE SUED BY A NON-CLIENT FOR NEGLIGENCE?
The
answer to that question is “probably.” At least in Missouri, New York, and
Iowa.
Missouri courts apply a balancing
test when determining if a “non-client” intended beneficiary of professional
services can sue for negligence despite a lack of privity. The leading case in
Missouri, at least as to accountants, is Aluma Kraft Manufacturing Co. V.
Elmer, 493 S.W.2d 378(1973). The Aluma court stated:
“The
determination of whether in a specific case the defendant will be held liable
to a third person not in privity is a matter of policy and involves...
Missouri Securities Division is Investigating new Missouri Limited Liability Companies
A membership interest in a
limited liability company is a “security” as broadly defined under the Missouri
Securities Act of 2003.[1] Now the Missouri Commissioner
of Securities, through its Enforcement Section of the Securities Division
(“Enforcement Section”), is sending letters to specified companies that have newly
filed with the Missouri Secretary of State as limited liability companies
or as foreign companies, which state it has received information of
participation in prohibited conduct by these companies. Section 409.6-602(b) of
the Missouri...
The Evolution of a Wells Process and the Anticipated SEC Sweeps
The Wells Process has a long history
dating back to 1972 when SEC Chairman William J Casey appointed John Wells
along with two others to the “Wells Committee.” The SEC is charged with the
compliance and enforcement of the federal securities law to protect citizens
from fraud and theft while maintaining a fair and efficient market. Before the
Wells Committee, the SEC could investigate, as it does today, but did not bring
forth any notice as to what they were investigating or even who they were
investigating. Attorneys who were specialized in this field could formally write
to the SEC, ask what...
Wells Fargo Advisors, LLC wins FINRA Award sum of $15,300,000.00+ in Damage
On February 2,
2023, a FINRA arbitration panel awarded the Claimant, Wells Fargo Advisors, LLC
a sum of 15,300,000.00 in Compensatory Damages and over $4,000,000.00 in
additional costs and attorney fees.
Case Summary:
In October 2018, Kent Jackson Rhoades left his job at Wells
Fargo Advisors, LLC in Mountain Home, Arkansas to start an independent
financial consulting firm with Raymond James Financial Services, Inc. Rhoades
not only left the corporate company to venture out on his own but also hired on
a 12- person team, all of which...