Can an investor demand a return of their investment if the believe fiduciary responsibility has been breached?

They can demand anything they want. As for whether it would be granted by a Court of Law; that should be discussed with a private attorney after a consultation.

The investor can demand a return of the investment but that will not happen because it is an inappropriate remedy. If an investment is unsuitable, unauthorized or otherwise contrary to applicable securities law, the appropriate remedy is rescission and restitution. If there is an allegation that a fiduciary responsibility has been breached,, there needs to be a thorough evaluation of the circumstances surrounding the offer and sale of the security as well as the appropriate remedy. More information is needed in order to provide a more definite discussion geared to the rights of the investor as well as the seller of the security.

Well, the investor can pursue you if they believe there has been a breach of fiduciary duty. But they still have to prove it. And that means you will need to know more about their allegations before you can make a decision on what course to take.

Yes. If you have a pending complaint, time to report it to your supervisor, if you have one. If you're a solo advisor, I would consult with a financial advisor defense firm. Plenty of good ones out there.

As a general matter, demanding the return of invested principal (or rescission) is one of the damage theories that can be pursued if a financial advisor or brokerage firm breaches a fiduciary duty. If the financial advisor or brokerage firm rejects your demand and you have to pursue legal action then your case would be either in court or binding arbitration. If your claim is against a FINRA brokerage firm or a broker registered with a FINRA brokerage firm then the case likely would have to be filed as a FINRA arbitration claim. I would recommend that you involve a lawyer who is well-versed in investment fraud matters at an early stage. The nature and substance of your demand for a return of your money can have a meaningful impact on the matter and you should make sure that the matter is handled properly.

State securities laws (perhaps Virginia or those of where this investor may reside) provide for rescission remedies in the event of misrepresentation or fraud. How these laws are enforced privately is another matter, as some states allow people to demand rescission through a lawsuit, while others limit the remedy to those acting on behalf of a state agency. But if this client/investor has lawyered up and has filed either a lawsuit or FINRA arbitration, you will need to lawyer up as well not only to defend the action but hopefully expunge your regulatory record as well. This person may well have already contacted state authorities, especially if they haven't lawyered up. You will need to counsel to deal with the regulators on your behalf to hopefully put the matter to bed if it comes to that.

A fiduciary is one with heightened responsibility and this standard is universally applied with the account is a discretionary account where the financial advisor makes the investment decisions for you. If you have a relationship with a stock broker that is non-discretionary the standard is suitability, meaning they only have to recommend appropriate investments in line with your goals and risk tolerance. You can initiate a dispute through the Financial Industry Regulatory Authority. I provided a link to http://www.securitieslawyer.com/securities-lawyer-faq/ my frequently asked questions page if you go to number 8 there is a video you can watch on what FINRA is and how this may be the path you want to take in pursuing your claim. Certainly before FINRA you can demand a return of your investment regardless of the standard that applies. Thanks, Lars Soreide

You have inquired whether an investor can demand a return of their investment if the investor believes a fiduciary duty has been breached. Of course, you can demand a return of your investment funds if you believe a fiduciary duty has been breached. The questions is whether the brokerage firm or investment advisor will return your funds without you initiating an arbitration or lawsuit. A breach of fiduciary duty claim can range from failing to execute an order to stealing your funds. If the alleged breach is relatively minor, you can generally expect that a brokerage firm or investment advisory firm will deny your claim unless you file an arbitration or case in court. If the alleged breach is major, such as a theft, the brokerage firm or investment advisory firm will likely desire to discuss resolution of your claim without initiating litigation. However, I would caution you to consider hiring a lawyer before settling a claim of breach of fiduciary duty. Your damages may not be limited to your out-of-pocket losses. Many times, the broker-dealer or investment advisor will not be willing to compensate you for lost interest or consequential damages. A lawyer will be able to advise if their settlement offers are fair. According to the Financial Industry Regulatory Authority (FINRA), more investors who have filed arbitration claims alleging breach of fiduciary duty than any other type of claim in 2015. Since a breach of fiduciary duty claim can be complex, I recommend that you seek a lawyer's assistance.

An investor may demand a return of their investment which is also known as claim for rescission. Rescission is a theory of damages which may be appropriate when the investment was procured by fraud. If the individual who sold the investment is a FINRA member and/or the brokerage firm involved is a FINRA member, the investor may file a FINRA arbitration claim. It is advisable for a defendant to a FINRA arbitration to seek counsel early in the proceeding. If the claim is meritless or settled for an insignificant amount of money, the broker may seek to have the complaint expunged from his or her registration.

Yes. Contact an attorney who understands Business law for more information. This is a very fact intensive matter and you should seek proper legal counsel to protect your rights.