Who is Liable?

[Stevan]

California.

Party A is a very experienced investor.
Party B represents they are an experienced investment manager.
Party A met party B several times, and even hired a private detective before giving funds to party B.
Parties B& C, and C & D were partners.

I referred party A to party B, and signed a "commission" agreement with party A that entitled me to share in profits from the investment.

Party A gave a Power of Attorney over his money to party B. Party B, without Party A's knowledge sent the money to party D who now says money was "lost"

Who is liable for damages to party A?

 

[I AM ALWAYS LIABLE]

California.

Party A is a very experienced investor.
Party B represents they are an experienced investment manager.
Party A met party B several times, and even hired a private detective before giving funds to party B.
Parties B& C, and C & D were partners.

I referred party A to party B, and signed a "commission" agreement with party A that entitled me to share in profits from the investment.

Party A gave a Power of Attorney over his money to party B. Party B, without Party A's knowledge sent the money to party D who now says money was "lost"

Who is liable for damages to party A?

My response:

Notwithstanding any fraud being involved, or breach of fiduciary duties, and if the money was invested and lost through a legitimate investment, and party "A" was informed of the risks involved, then no one is liable. That's what the term "investment" means; i.e., that an investor takes a "chance", "a risk", that the investment will pay off, or could be lost. That's why banks are FDIC insured. If you want to play the game, you've got to accept the risks.

If the Power of Attorney gave full control to "B", and did not have a clause in it about placing "A" on Notice prior to any investment, then the money was as good as being the property of "B" and there is no liability on the part of "B".

In summary, the word "investment" does not mean "guaranteed return".

IAAL

[Edited by I AM ALWAYS LIABLE on 02-24-2001 at 04:45 PM]