Couple can sue investment advisers
Nestor and Maria Kleer sued their investment advisers, James F. Peters, Jr. and Paul J. Simon, alleging a breach of fiduciary duty. They did not allege that Simon was "still crazy after all these years." The trial court dismissed the Kleers' lawsuit, but the Court of Appeals reinstated it. The higher court pointed out that the parties executed a contract which defined their investment strategies. After a number of years of aggressive growth, the advisers recommended a change in strategy to less aggressive investing to minimize potential losses. The Kleers agreed and an amendment was executed stressing a "no loss" strategy.
The Kleers maintained that the advisers made no attempt to revise their investments and therefore should be responsible for the severe losses the Kleers suffered in succeeding years. The advisers argued that they were protected by a "no guarantee" clause in the contract. The lower court agreed with the investment advisers, but the higher court reversed: while the advisers did not guarantee an outcome, they could be sued because they allegedly never made the changes in investment that the newly agreed-upon strategy required them to make.