Question

Mia feels she has been treated unfairly by her investment advisor and the IA's dealer member. She believes her account is worth $50,000 less than it should be because the advisor offered inappropriate advice. How do you suggest Mia handle the situation?

1) Request arbitration.
2) Exercise her right of rescission.
3) Request reimbursement through the CIPF.
4) Appeal to the Federal Securities Commission.

Answer 1

Mia should consider requesting arbitration, exercising her right of rescission, asking for reimbursement through the CIPF if applicable, or appealing to the Securities Commission. She should also document her case well and may seek legal advice.

Step-by-step explanation:

If Mia feels she has been treated unfairly by her investment advisor and the dealer member, resulting in a loss of $50,000 due to inappropriate advice, there are a number of steps she could take to handle the situation:

1. Request arbitration through the financial regulatory body that oversees investment advisors. The arbitration process is a way to resolve disputes without going to court and can lead to a binding resolution.
2. Exercise her right of rescission, if applicable. This right allows an investor to void a transaction and receive a refund under certain circumstances if the investment was based on misleading or incorrect information.
3. Request reimbursement through the Canadian Investor Protection Fund (CIPF) if the member firm becomes insolvent or bankrupt and the loss is a result of the firm's insolvency. It does not cover losses due to bad advice.
4. Appeal to the appropriate Securities Commission or regulatory authority in her jurisdiction. This may lead to an investigation into the actions of the advisor and could result in penalties for the advisor or restitution for Mia.

Before deciding on which step to take, Mia should thoroughly document her interactions with the advisor, review her investment contracts, and consider seeking the advice of a legal professional who is familiar with securities law.