Fisher Investments Inc., the firm run by Forbes magazine columnist Kenneth Fisher, may have to pay damages of $376,075 for breaching its fiduciary duty to a retired investor.
Sharyn Silverstein, 64, is entitled to out-of-pocket losses she incurred as a result of Fisher Investments liquidating her bond portfolio and investing 100 percent of the proceeds in stocks, according to a copy of the interim arbitration award obtained by Bloomberg News. Silverstein had invested with Fisher in 2007 after multiple calls and visits from a Fisher outside salesman, according to the award document. She had initially contacted the firm after seeing a Fisher advertisement for a complimentary book in USA Today, the document said.
"She called Fisher to get a copy of a free book, with no intention of doing business with Fisher, and ended up being pressured and eventually persuaded, despite significant resistance on her part and that of her husband, to turn over all of her fixed-income securities to Fisher to be invested in equities," Karen Willcutts, the JAMS arbitrator for the case, wrote in a 25-page interim award dated July 5. JAMS, based in Irvine, California, is a private forum for arbitration and mediation. Some investment adviser firm agreements include a clause that parties must resolve any disputes through private arbitration.
"The decision was completely wrong on the law and the facts. With more than 25,000 clients, losing an arbitration once every seven years is a record far better than any major competitor, which underscores the integrity of our firm," said David Eckerly, group vice president corporate communications for Woodside, California-based Fisher Investments. Kenneth Fisher is the firm’s founder and chief executive officer..
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Sharyn Silverstein, 64, is entitled to out-of-pocket losses she incurred as a result of Fisher Investments liquidating her bond portfolio and investing 100 percent of the proceeds in stocks, according to a copy of the interim arbitration award obtained by Bloomberg News. Silverstein had invested with Fisher in 2007 after multiple calls and visits from a Fisher outside salesman, according to the award document. She had initially contacted the firm after seeing a Fisher advertisement for a complimentary book in USA Today, the document said.
"She called Fisher to get a copy of a free book, with no intention of doing business with Fisher, and ended up being pressured and eventually persuaded, despite significant resistance on her part and that of her husband, to turn over all of her fixed-income securities to Fisher to be invested in equities," Karen Willcutts, the JAMS arbitrator for the case, wrote in a 25-page interim award dated July 5. JAMS, based in Irvine, California, is a private forum for arbitration and mediation. Some investment adviser firm agreements include a clause that parties must resolve any disputes through private arbitration.
"The decision was completely wrong on the law and the facts. With more than 25,000 clients, losing an arbitration once every seven years is a record far better than any major competitor, which underscores the integrity of our firm," said David Eckerly, group vice president corporate communications for Woodside, California-based Fisher Investments. Kenneth Fisher is the firm’s founder and chief executive officer..
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