If you are an investor who lost money in the financial crisis, your stockbroker or investment advisor may owe you money. There are a variety of legal claims that can be brought for investment malpractice, ranging from fraud and misrepresentation to making unsuitable investment recommendations. But there are also legal deadlines for bringing such claims, and time may be running out if you have not yet discussed your options with a lawyer who handles investor rights claims.
Craig T. Jones, a lawyer with the Atlanta firm of Page Perry, represents a number of investors in arbitration claims against brokerage and advisory firms. “It has now been three years since much of the malfeasance that nearly brought Wall Street down,” says Jones, “but there may still be time to act depending on where you live and what type of claim you have.” Jones points out that each state has its own laws and its own statutes of limitations for various types of claims. “If your broker lied to you or gave you bad advice, there may be more than one way to state that claim?each of which is going to have its own statute of limitations.”
For example, a given state could have a four-year statute of limitations for fraud but a six-year statute of limitations for breach of contract, while another state could have a three-year statute of limitations for all claims. Some states have deadlines of as long as ten years for certain types of claims, such as breach of fiduciary duty, but in another state that same deadline may be a year or less. Many states have a “discovery rule” for fraud that means the statute of limitations clock does not start ticking until the date that you discovered?or should have discovered?that you had been defrauded.
It may be possible to bring the claim in more than one state, depending not only on where the investor lives but where he transacted business with the broker or on whether the account agreement has a “choice of law” provision that dictates what state’s law applies to any claims that may arise. If there are multiple options, an investor’s lawyer will choose whichever state gives the investor the largest number of possible claims or the best chance of winning.
It also should be noted that arbitrations are based upon considerations of fairness rather than legal technicalities, and arbitrators?unlike judges?are not necessarily bound by choice of law provisions or even statutes of limitations. Nonetheless, lawyers who represent investors should try to be cognizant of such technicalities whenever possible because it is often difficult to predict what an arbitration panel will do.
According to attorney Jones, “you may still have a viable claim for arbitration purposes even if it is past the statute of limitations, but first you want to carefully examine all available legal theories?and the statutes of limitations applicable to each of those options?in order to maximize the chances of success.” Even if you think it may be too late to pursue a claim, Jones recommends that you consult a lawyer anyway to explore what options may still be available. Jones’ law firm is based in Atlanta but handles cases all over the country.