Legal Question in Investment Law in Washington

Possible Stock broker malpractice. Advised to stop payment on taxes and leverage

Fiance made over 400k in 99. 50% investment gains.50% w-2 dec99: went to pay quarterly tax from his investment firm checking account. Broker/aslo a cpa advised he wait until April. Broker using Margin and options, loses money , did not make stops. When Fiance wrote check for 172K to IRs in May, Broker put stop payment and told him he was investing it to leverage it. He lost 70k. fiance said lower the risk. Broker lost another 100K Fiance said no more risk. Broker lost 100K. Fiance cannot pay taxes. broker gave same advice to a peer and lost his money. Fiance has no finacial/tax law training, trusted Broker. fiance devastated. Wedding cancelled, ring returned. is this considered bad advice, mal practice.?


Asked on 8/18/00, 1:22 am

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: Possible Stock broker malpractice. Advised to stop payment on taxes and leve

You have an excellent case. Your only problems in recovering should be documenting the broker's failure to follow instructions and depth of his, or his firm's, pockets. What national trade associations does the broker or his firm belong to? What facts can you gather about other clients with similar losses caused by this broker?

Save all your paperwork, phone records etc. and review the broker-client contract to see whether it has an arbitration clause. Then see an attorney. Fast action is recommended due to IRS action threat and possible loss of evidence, failure/disappearance of broker, and statutes of limitations.

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Answered on 9/25/00, 1:42 pm


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