Fisher Investments, one of the country’s most noted investment advisory firms, has been tagged with a $1.2 million arbitration claim, alleging that it failed to live up to its fiduciary duty during the recent calamitous market meltdown.
Ken Fisher, the firm’s chief executive, said the matter is hogwash.
“The claim is nonsense,” he said in an interview Monday.
Referring to one of the plaintiff’s lawyers in the matter, Andrew Stoltmann of The Stoltmann Law Offices PC, Mr. Fisher said: “He’s going to spend a lot of money and get nothing.”
Furthermore, Mr. Fisher said, he wants to teach Mr. Stoltmann “a lesson he won’t forget.”
When told of Mr. Fisher’s comments, Mr. Stoltmann, co-counsel in the claim and whose practice is based in Chicago, said: “Bring it on, bring it on.”
The arbitration statement of claim, which was filed last Tuesday in Atlanta, alleges that
Fisher Investments of Woodside, Calif., invested too much of a retired doctor and his wife’s $2.5 million portfolio into stocks, even with the market in free fall last year.
“As the market continued to plunge throughout 2008, there was one common theme from
Fisher Investments: blind optimism and staying fully invested in equities,” the arbitration claim states.
“Despite overwhelming evidence of a
bear market,
Fisher Investments kept its elderly and retired clients almost 100% in equities,” according to the arbitration claim, which was filed with JAMS of Irvine, Calif., a private provider of alternative dispute resolution services.
Mr. Fisher said he would not comment about the claim’s specifics, because that would violate the privacy of the clients, Brent and Michelle Murphy of Savannah, Ga.
Mr. Murphy is 61, and his wife is 60.
“In this matter, everything we did was appropriate,” Mr. Fisher said, adding that the firm is not going to settle with lawyers simply to make the claim disappear.
“If we thought we did something wrong, we’d simply give the client the money, and they wouldn’t have to go to arbitration,” he said.
The Murphys began investing with
Fisher Investments in 2007.
Mr. Stoltmann said the claim hinged on
Fisher Investments’ failure to act as a fiduciary and that the firm did not diversify the Murphy’s portfolio appropriately, particularly as they were retired and needed to invest in fixed-income investments.
He expects to file more claims against
Fisher Investments in the coming weeks that make similar allegations.
Fisher Investments has $28 billion in client assets and 37,648 accounts, making it one of the largest registered investment advisory firms in the United States.
