Client Pays Price When Advisor Fails to Execute Trades

When a financial advisor with Oxford Financial failed to execute a sale involving securities investments worth millions of dollars in a timely manner, his client – Reid Hospital & Health Care Services of Richmond, Indiana – paid the ultimate price. The delay cost Reid some $2.5 million.

Reid has filed a lawsuit in an attempt to recover the $2.5 million. It also is in the processing of cutting ties with Oxford, says Mark Maddox of Maddox, Hargett & Caruso, P.C., the firm representing Reid Hospital & Health Care Services.

As reported March 26 by the Indianapolis Business Journal, Reid initially instructed an investment advisor at Oxford to move forth with its request to sell securities investments on Aug. 1, 2011. The request, however, wasn’t actually fulfilled until Aug. 12. Had the sale been made on the date that Reid instructed, the investments would have been spared the financial beating they took following an Aug. 5 announcement by Standard & Poor’s in which the United States lost its AAA credit rating.

Based in Carmel, Indiana, Oxford Financial is an investment advisory business. Oxford advisors don’t actually execute trades but rather work with broker/dealers to perform a client’s transactions. At the same, however, investment advisors are required to uphold certain fiduciary duties just like broker/dealers – and that includes meeting what the Securities and Exchange Commission (SEC) says is an obligation to obtain “best execution of their clients’ transactions.”