Recovery of Investment Losses Caused by 2020 Market Crash

Many who have experienced investment losses recently may be surprised that you were exposed to so much downside risk. Your financial advisor, in fact, may have owed a duty to protect your portfolio against a market crash.

Stockbrokers are required to recommend only suitable investment strategies. This is known as the “suitability rule.”  For those investors who could not afford to risk substantial amounts of money, their stockbrokers were required to recommend investments that would hedge or protect against a market downturn – even a downturn as drastic as the crash we recently experienced during the coronavirus pandemic in March 2020. If your stockbroker failed to take proper protective measures, and exposed you to unsuitable risk of loss, then he or she may have violated the suitability rule.  

Your financial advisor also may have over-concentrated your portfolio in unsuitable investments such as leveraged ETFs or ETNs, volatility (or VIX) related investments, high-yield “junk” bond funds, or illiquid products such as REITs. These products are extremely speculative and high-risk – and they typically result in losses several times greater than the general market losses. These types of investments are not suitable for many investors.

Morgan & Morgan’s Business Trial Group is here to help. If you have suffered investment losses during the 2020 coronavirus pandemic, call an experienced securities attorney with our Business Trial Group for a free consultation at 800-816-1031.

The Business Trial Group at Morgan & Morgan is part of the largest contingency law firm in the nation, with more than 700 lawyers and offices across the country. We help investors recover their financial losses on a contingency basis – meaning we are only paid if we successfully recover money for you. We regularly battle against brokerage firms, investment advisory firms, and banks, and we have helped investors recover tens of millions of dollars of investment losses.