The plaintiffs sued their investment advisor and his firm for breach of contract, negligence, and breach of fiduciary duty arising from the handling of their investment accounts.
The court found that the advisor failed to comply with the 'know your client' rule, engaged in unsuitable short-term trading, and exercised unauthorized discretion, while the firm failed to properly supervise the accounts.
Although no fiduciary duty was owed to the more knowledgeable husband, fiduciary duties were owed to and breached regarding the wife and son.
The court rejected defenses of ratification and limitation periods (except for a late-added tax claim) due to the plaintiffs' lack of knowledge of the misconduct.
Damages were awarded for capital and opportunity losses, reduced by 30% for the plaintiffs' contributory negligence.
