When an investment goes wrong, sparks often fly...and litigation by the person who has suffered a loss can follow.
Investment disputes take many forms. Probably the most common is where the person who has made the investment alleges that the level of risk inherent in it was not properly explained to them and that they would not have made the investment and suffered the loss if it had been.
Investment & Banking Disputes Lawyers London
Sometimes (as in the cases brought by Lloyds underwriters who suffered substantial losses by being invested in syndicates that provided insurance cover against industrial illness cases in industries that suffered a blitz of asbestosis and 'black lung' claims), the allegation is that they have been defrauded by being deliberately misinformed about the level of risk involved.
The second most common type of dispute is when the person who has suffered the loss alleges that the person responsible for investing their money did so without proper authority.
There are a whole variety of other possible investment disputes, often involving simple negligence.
Where the dispute involves an adviser who is regulated under the Financial Services Act 2012 (FSA), this is regulated in the UK by the Financial Conduct Authority (FCA). or previous legislation it is sometimes best to use the Financial Ombudsman.
It is essential to remember that where the Financial Ombudsman service is used, the compensation payable is limited and so the right to recover any losses in excess of the maximum is lost. Before you consider using the service, take our advice.
You should always ensure that you know whether an investment you are being asked to make is covered by the FSA and protected by the compensation scheme operated by the FCA. The protection available is limited in scope and does not cover the making of unwise investments.
When a businessman lost out after clearly improper advice was given by a regulated investment adviser, he intended to use the Ombudsman service to obtain compensation.
However, that would have limited his compensation. Using legal proceedings instead meant a full recovery of his losses.
Disputes involving unregulated investments
Many disputes over investments involve intermediaries who turn out not to be regulated in the UK. This will normally be the case when the investment is a type not regulated under the FSA, where the person advising on the investment is not regulated.
There are many investments that are unregulated, and any investment made through a non-UK resident intermediary is not covered. There are many unscrupulous people in this market, from 'boiler rooms', who make unsolicited calls offering (usually worthless) shares that are tipped to rocket in value, to Ponzi schemes, which guarantee well above average returns on 'safe' investments.
In general, ANY investment offered by a third party which claims to offer well above market rate returns should be treated with extreme caution.
One of the more common issues involves investments in private companies or other businesses where the financial health of the business is worse than has been represented to investors.
Disputes of this kind often lead to a claim against the company's auditor for negligence.
How Selachii Can Help
We can assist you to ensure your interests are protected to the maximum extent possible when you enter into an investment or advise you what your legal rights for restitution are if an investment you make goes wrong. We are a dynamic litigation and dispute resolution law firm and our clients' interests are always at the heart of everything we do.
Based in Kensington, London, we work with both businesses and private individuals, giving them legal advice and support which is unique to them and their situation.
We don’t believe in simply handing out one-size-fits-all solutions to problems. We will focus on your specific circumstances before working out the best and most cost-effective way of helping you achieve your aims.