This is a variation on a type of arbitration/regulatory complaint,
which is a variation on a suitability claim. As Internet and
Technology stocks roared upwards in the late 1990s, more and
more investors invested in those securities. Not only did
they invest in them, they left other sectors of the market,
and placed an increasing percentage of their assets in Internet
and Technology stocks. Now, after the bubble burst, investors
are filing complaints against their brokers for the over concentration
of their portfolios in these sectors.
The claim is a difficult claim to prove, for the issue is
nearly always that the customer expressly desired the investment
in these sectors, and that given the time, and the climate,
the investments were in fact suitable for the investor, as
they fit the investor's risk tolerance and investment objectives.
Like most customer claims, the success of this type of claim
depends heavily on the facts of the case, and the particular
circumstances of the investor.
more information, see Typical
Customer Disputes at the Securities
Law Home Page.
Failure to Diversify,
or overconcentration, is a variation of a suitability claim.
In recent years, this claim has quickly become one of the more
frequent securities arbitration claims.