Sued mutual fund company for losses
Client had significant money in several mutual funds with one mutual fund company. Client accessed her account online and discovered that nearly all of the funds in her account were no longer in the account. The mutual fund company performed an investigation and determined that when client divorced her husband, she did not change the user name and password on the account. The company suspected the former husband and investigated the loss but could find no evidence to suggest that he made the transfers in question. Client sued the mutual fund company based on a statement in their prospectuses that provided that the company would not reimburse customers for losses caused by the customer or someone who the customer allowed to access the account. Alan argued that this language could be interpreted as a warranty that the company was guaranteeing that it would reimburse customers for losses in their accounts that were beyond their control. The court agreed and denied the company’s summary judgment motion.
Result: Case settled, with client getting back all amounts lost from her account and most of her attorney’s fees.
