misrepresentation of stockbroker as CFP

[fantasm897]

I live in MD. I've had a relationship with a stock broker who also has CFP (certified financial planner) after her name. I relied on her knowledge in this area when taking her advice about a stock sale, on which I now owe a large sum of capital gains taxes. Because I felt I'd not been given info I needed, I checked with the CFP Board and found out that her license expired 10 years ago (voluntarily, not disciplinarh). Yet she's still masquerading as a CFP. Even though my relationship with her was primarily as stock broker-client, do I have some recourse for her misrepresenting herself? And should the brokerage firm be held liable for not making sure her credentials were valid?

 

[ALawyer]

The complaint would have to be based on the incorrect advice she gave to induce you to make a transaction, and I think that to recover damages you would have to show: 1. that you suffered a loss, 2. that the loss was caused by the advice, and 3. you had a reasonable basis to rely on that advice.

If she told you to sell Priceline at 100 and there would be not taxes, and you are complaining about having to pay the capital gains taxes, now that it is at 3, you'd not really have a basis for complaint as if you held you would have lost.

If the loss was clearly the result of her advice, and she was not one of 100 saying the same thing, that's number 2.

Then it depends what she said. She'll likely "remember things" a bit differently than you. She may deny it or say "I THINK THIS IS WHAT IT IS BUT ASK YOUR ACCOUNTANT" or say you knew she wasn't an accountant. Here the fact she represented herself as a CFP would help you prove reasonable reliance.

The matter seems like more of an embarrassment to the firm than any independent basis for civil action in the NASD or NYSE arbitration proceeding you'd have to go to to recover.