Firm Secures Favorable Settlement for Investor in Options-Trading Debacle

We recently resolved an options-trading case for one of our retail investor clients. The client had a once-in-a-lifetime financial event when he sold a business. After using some of the proceeds to support his mother and siblings, he engaged a trusted financial advisor at a major brokerage firm to help him build his retirement savings and preserve his capital.

The broker pitched an options-trading strategy that he claimed would thrive in all market conditions—up, down or highly volatile. Our client, having no experience with options, went along with the recommendation, which he understood had been tested and vetted by the firm’s senior management. Instead of preserving his capital, the broker’s strategy destroyed the savings, resulting in six-figure capital losses.

We filed a FINRA arbitration against the brokerage firm, the broker and his supervisor and then engaged a mediator to assist in obtaining a fair settlement that required all our opponents to contribute to the payment.

The resolution restored a healthy percentage of our client’s losses, but it was a long and difficult process to reach that target.

If you believe a financial advisor has recommended and implemented a trading strategy, portfolio composition or other approach that is not appropriate for your investment objectives, risk tolerance, time horizon or investment experience level, you can contact us by calling 212.203.1249 or emailing kevin@galbraithlawfirm.com for a free, confidential consultation.