Fisher Investments Reportedly Has Faced Multiple Arbitration Claims Alleging Over-Concentration in Stocks

by Christopher J. Gray on October 6, 2011

in Uncategorized

A recent arbitration decision against Fisher Investments is reportedly not the first time JAMS arbitration has heard Fisher Investments complaints. At least two other actions concerning Fisher Investments performance have been filed against the firm in recent years, alleging the company put too much of an investor’s account in equities, which resulted in massive losses when the market collapsed.

In 2009, at least two investor claims were reportedly filed against Fisher Investments alleging breach of fiduciary duty. One was a lawsuit, filed by investor Maurine Ford, who says that Fisher Investments purchased her assets in 2008; prior to that, her living trust was managed by Lighthouse Capital Management LLP. According to the plaintiff, when the account was transferred to Fisher Investments, it was 27 percent cash, 41 percent equities and 32 percent fixed income. Ford alleges once Fisher took over the account, it recommended reallocation so that it could be 100 percent invested in equities.

When the market collapsed, Ford reportedly lost a substantial amount from her living trust.

A second, similar action was an arbitration, filed in Georgia by Michelle and Brent Murphy, who allege Fisher Investments kept almost 100 percent of their investments in equities despite the collapse of the stock market. The couple’s arbitration sought $1.2 million.

At the time the arbitrations were filed, Fisher Investments CEO Ken Fisher reportedly called the allegations nonsense.

InvestorLawyers.net’s founder Christopher J. Gray is presently handling a case against
Fisher Investments on behalf of investors who (similar to the claimant in the case that was won) allege that Fisher exposed them to inappropriate risks by over-concentrating their accounts in almist 100 percent stocks and other investments exposed to losses in the event of drops in the stock market. The complaint alleges that rather than receiving the customized investment plan they paid for, the investors were placed in Fisher’s “one size fits all” investment scheme which was completely unsuitable and entirely misrepresented to them.

Specifically, the clients are retirees who entrusted a large portion of their life savings to Fisher and were relying on the assets managed by Fisher to provide income during their retirement and were very concerned that their money be managed in a manner that would provide a reasonable level of return while minimizing the risk of the loss of any substantial portion of their principal.

Although Fisher, which is a registered investment advisor charged with a fiduciary standard for its clients, allegedly promised an individualized investment plan for the clients, which would take into account their status as retirees focused on principal preservation, Fisher allegedly did nothing more than place plaintiffs in a “one size fits all” investment regimen which followed Fisher’s general investment plan of 100% exposure to the stock markets (domestic and international).

Ultimately, this risky strategy, which was completely unsuitable for plaintiffs, backfired.
When the broad stock market indices plummeted in 2008 and early 2009, the value of the investors’ accounts, which were almost completely invested in stocks or Fisher funds containing stocks, lost approximately $1,200,000.

Investors who believe that may have been the victim of misrepresentations or account mismanagements by Fisher Investments may contact InvestorLawyers.net attorneys by filling out the form below or e-mailing newcases@investorlawyers.net.

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