Legal Question in Investment Law in Florida

Liquidating Mutual Funds

I asked our investmnet firm to liquidate our mutual funds to transfer the cash to a bank trust company. Six days after they confirmed receiving the liquidation order they were still purchasing mutual funds. 11 days after the order, they liquidated all the mutual funds - at a huge loss to us.

Now, 17 days after the liquidating date, they still have not made a settlement on the loss. What can we do?


Asked on 10/27/08, 7:42 am

3 Answers from Attorneys
Warren Markowitz Warren R. Markowitz, Esq

Re: Liquidating Mutual Funds

Simply put, you can file an arbitration claim against the firm for failure to follow customer instructions, possibly including unauthorized trading and then you can claim the losses incurred as damages.

You should attempt to resolve this dispute in a more informal manner before attempting Arbitration, as the time involved can be substantial and there is no guarantee that the board will find in your favor.

As a former compliance officer in a brokerage firm I am familiar with the events that your are talking about and have dealt with similar issues repeatedly in the past.

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Answered on 10/27/08, 12:19 pm
Eric Norstedt Eric Norstedt, P.A.

Re: Liquidating Mutual Funds

The Investment Company has a fiduciary duty to "carry out a customer�s orders promptly in a manner best suited to serve the customer�s interests". If your investment failed in this duty you may have a negligence claim to recover your losses. Please contact me should you want to discuss this further.

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Answered on 10/27/08, 12:49 pm
Mark Tepper Mark A. Tepper P.A.

Re: Liquidating Mutual Funds

You have the following options: you can hire counsel to either negotiate a settlement or you can file an arbitration claim. We would be happy to discuss these options with you. Feel free to call us for a no-cost consultation.

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Answered on 10/28/08, 5:10 pm


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