Category Archives: Financial Advisors

The New Fiduciary Rule: Are you Prepared?

The Department of Labor recently announced its new Fiduciary Rule – aka the “conflicts of interest rule.” This new rule expands the definition of fiduciary and alters how investment advice is delivered in retirement accounts. It won’t go into effect for at least another year, but it’s not too early to start thinking about how the changes will affect the professionals who render this advice.

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Alternative Litigation Financing Sparks Malpractice Claim

A modern-day offshoot of the contingency fee arrangement is "alternative litigation financing." Also known as third-party litigation financing, A.L.F. is the practice of making cash advances, usually to a litigant, to be repaid from the proceeds from the litigation. There is plenty of room for debate the pros and cons of this developing trend. Supporters may argue that this practice allows an injured plaintiff to take an “advance” on an anticipated recovery to address financial hardship before reaching a settlement or verdict. This is particularly useful for injured plaintiffs who cannot return to work. But attorneys associated with litigation financing may be susceptible to claims when something goes awry.

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Oh Brother: Financial Advisor Targeted for his Sibling’s Fraud

A financial advisor was recently named in a multi-million dollar malpractice matter in Texas arising from the alleged fraud of his brother. The financial advisor - the managing partner of DEW Wealth Strategies, LLC - allegedly allowed his brother to use the firm’s offices. Innocent enough, right? But according to the complaint, the brother and a company he owned, Gateway Special Opportunities Fund LLC, backed out of providing the plaintiff with millions in funding for a large condominium project in California. The brother ultimately agreed to pay the plaintiff $30 million after conceding he misrepresented the financial position of his company and the plaintiff secured a $30 million judgment. When the plaintiff could not collect on the judgment he found a new target: he is now pursuing fraud and related claims against the financial advisor.

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