July 8, 2011

Fisher Investments Inc. Ordered to Pay Retired Investor $376,075 Over Breach of Fiduciary Duty

Fisher Investments Inc., which is a financial firm operated by Kenneth Fisher, has been ordered to pay $376,075 to a senior investor for breach of fiduciary duty. Fisher is a Forbes magazine columnist.

According to Bloomberg News, which obtained the interim arbitration award document, Fisher Investments liquidated investor Sharyn Silverstein’s bond portfolio and placed the entire proceeds in stocks. Per Karen Willcutts, the JAMS arbitrator for the case, Fisher not only pressured the 64-year-old retiree into investing, but also, it persuaded her to hand over all of her fixed-income securities so that they could be placed in equities.

The award document says that rather than making sure that the investments were appropriate for Silverstein and her husband’s financial situation and investment goals, Fisher gave Silverstein the same recommendation it gives most of its clients, which is “100 percent equities benchmarked to the MSCI World (MXWO) Index.” The Silversteins told their investment counselor that they were worried about the 100% stock allocations recommendation and they asked Fisher to stop handling their account for the moment. A Fisher salesperson then reportedly called Silverstein to express disapproval about the couple’s wanting to pause and said there would be a fee. Silverstein then decided to let the financial firm keep managing her count. The couple expressed similar concerns the next year and once again they were given assurances about their assets.

Silverstein, who invested with Fisher between September 2007 and October 2008l lost approximately $376,075 of her $876,357 investment. Aside from the award, she also may get back attorney’s fees, interest, and other expenses.

Related Web Resources:

Kenneth Fisher’s Firm Told to Pay $376,000 on Retiree Investment Losses, Bloomberg, July 7, 2011

Fines, Awards Slapped on JP Morgan, Fisher Investments, Merrill Clearing, AdvisorOne, July 8, 2011


Ken Fisher

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