Stock Bounced the Wrong Way

An investor placed over $100,000 of assets with an investment advisory firm. The adviser purchased a certain distressed stock. The investor questioned the investment, but the adviser assured him that this stock always “bounced” back and produced positive returns for his clients. The investor lost over $50,000 in the investment. The investor sued alleging that the adviser was negligent; that the investments were not suitable; misrepresentation, breach of fiduciary duty, violation of state and federal securities laws and violation of NASD Rules of Fair Practice; and breach of contract and breach of implied covenant of good faith and fair dealing. Total Cost: Approximately $50,000.