Legal Question in Investment Law in New York

Share dealings

I bought some shares a few years ago, on the recommendation of my broker. The prices plummetted. I sold the shares and reinvested. The shares were locked in for 18 months. When I tried to sell them I was recommended by my broker to hang onto them (the shares were part of the company he worked for). I hung on and the shares dropped by a further 25%. I asked him in Nov 05 to sell them, he asked me to fill in some forms for release of shares which I did and he told me it would take 'a few weeks' to release them. I have chased him since (on many occassions), but the shares have still not been sold. Since Nov 05 the shares have lost a further 25% in value. Will I have a legal case to sue him for the difference of the monies since I asked him to sell, taking into consideration that it has been over 4 months since I informed him in writing to sell my shares?

I have written proof of emails and faxes that have been sent and share data which will back up my story.


Asked on 3/31/06, 10:44 am

2 Answers from Attorneys
Meyer Silber The Silber Law Firm, LLC

Re: Share dealings

Unusual facts. If a broker fails to follow your reasonable instructions concerning any buy or sell, you may have a claim. It is difficult to give you any further guidance without knowing additional facts. Chances are, though, you will have to arbitrate any claims you may have.

Please let me know if you'd like to discuss this further.

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Answered on 3/31/06, 11:12 am
Carlos Gonzalez Gonzalez Legal Associates PLLC

Re: Share dealings

In looking at the facts you've given it seems quite clear to me what is going on. I would first like to ask you how did you hear of this broker, and how did you first come into contact with this broker. I would assume, by the facts you've given, that the broker made first contact with you through the telephone or some mailing.

I have worked with many cases involving a VERY similar fact pattern. Where investment companies create stocks which in turn they market, wholly illegal by the way, and make money by selling these tshares to unsuspecting clients over the phone or through mailings promising you great returns on small investments.

REMEMBER - if it sounds too good to be true it probably is.

You would have several course of action to consider in such a situation. The first step would be to find out as much info as you can about the company which you're doing busines with. WHile working with the Attorney General's Office, Bureau of Securities, I encountered many cases of brokes which were not ever even registered, engaged in practices like these.

The registration of the broker would be an important factor in how to continue, iI cant really get into specifics since I have very limited facts to go on but feel free to contact me if I can help with your case.

Carlos Gonzalez, Esq.

7185419077

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Answered on 3/31/06, 12:14 pm


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