Alternative investments like hedge funds,private equity,and risky derivatives can produce major losses for investors. When this happens,investors have several options under the law to try recovering their money. An attorney experienced with securities litigation may advise investors on their rights and legal options. This can include filing a FINRA arbitration claim or lawsuit against the investment advisor or brokerage firm if they acted improperly. Or in some cases,joining a class action lawsuit with other investors against a hedge fund or issuer that committed fraud or other misconduct. Lawyers can assess if legal action may lead to investor compensation. But the outcomes often depend on specific facts and are not guaranteed.
Consult securities attorney to understand legal options for losses
When investors lose significant money in alternative investments like private equity funds or structured products,their first response is usually shock,anger and confusion. They trusted their advisor or broker to put them in suitable investments,but now are facing major losses instead. The investments may have violated securities regulations,the investment contract,or involved outright fraud against investors. Whatever the exact cause,a securities attorney can help investors understand their legal rights in the situation. An experienced investment loss lawyer can study the details of the case and advise if the investor has grounds to pursue legal action to recover losses. This includes options like:
File claim or lawsuit against investment advisor / broker
If the financial advisor or brokerage firm gave improper investment advice or misrepresented the risks of an alternative investment,the investor may have valid grounds for a legal claim. Securities attorneys can advise if losses may have been caused by advisor negligence,unsuitable recommendations,misrepresenting investment risks,excessive trading in client accounts (churning) or outright fraud. Depending on facts of the case,the attorney may first file an arbitration claim with FINRA against the brokerage firm to recover losses. Or file a lawsuit against the advisor and firm to claim damages.
Join investor class action lawsuit
For many alternative investments like hedge funds or private equity funds that commit major fraud or violations harming investors,other investors will band together to launch a class action lawsuit. By joining as part of the investor class,individual investors can share resources and the risks of mounting a legal challenge against well-defended financial firms. Securities lawyers organizing class actions have deep expertise to prove wrongdoing before courts and can negotiate much higher potential settlements for investors. An individual investor joining the broader lawsuit stands to recover far more than trying to take legal action alone.
Claim losses from advisor errors on tax return
In certain cases where investors lose money because a financial advisor placed them in unsuitable or fraudulent investments,they may qualify to claim losses on their tax return. Securities attorneys can determine if the type of violations or advisor misconduct allows tax deductions for major losses under IRS rules. Claiming alternative investment losses on tax returns provides at least some financial relief.
Alternative investments can expose investors to higher risks of losses compared to stocks and bonds. Securities lawyers specializing in investor rights and arbitration claims can best determine the legal options available if investors face losses in private equity funds,structured products,derivatives or other complex investments. In many cases,legal remedies allow investors to recover some or all lost money either through settlements,arbitration awards or court judgements against responsible financial firms.