I was recently contacted by a client who lost several million US dollars due to negligent investment advice. Because the firm is based overseas, the client did not know what to do. Unfortunately, this scenario has become all too common in the wake of the global financial crisis.
Whether your claim is against an institution based in the U.S., the EU or elsewhere, you have a number of options. I will very generally touch on them below.
Many wealthy investors rely on foreign investment advisers who are typically employed by international financial institutions.
Unfortunately, as a result of the global financial crisis many investments advisers understated the risks involved with – for example in structured products linked to stock market indices.
Almost all legal systems have a concept of negligence, which would make a financial adviser potentially liable if the quality of their advice fell below that to be reasonably expected, causing loss to a client.
Your adviser is also very likely to be subject to local financial regulation and supervision that might include compensation schemes. But where these options are not available locally, or have proved unsatisfactory, your only option might be to sue.
