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John Courtade
Attorney at Law
4408 Spicewood Springs Road
Austin, Texas 78759
tel: 512.502.1135
fax: 512.502.1138



INVESTOR'S QUESTIONNAIRE
IMPORTANT: PLEASE READ THE DISCLAIMER
 IF YOU HAVE NOT DONE SO ALREADY
[CLICK HERE]

An investor contemplating legal action and an attorney evaluating the investor's claim have a common goal: setting all the facts before the attorney in an organized fashion so that the attorney can give his or her best advice. The following guide organizes the information that will typically be relevant to a securities claim by an investor. All information is subject to attorney-client privilege since, even though we do not have an attorney-client relationship, you are considering such a relationship. It is critical that information be complete and candid. My opinion and advice depend on the facts you describe, even difficult or unflattering facts, just as your doctor's diagnosis and recommendations depend on the symptoms you describe.


I also recommend that you review the important caution about statutes of limitation on this website.


BASIC INFORMATION


1. Name(s) of investor(s).





2. Investor's home and business addresses, telephone numbers, fax numbers, and e-mail address (if any).





3. Name and address of the broker-dealer firm, investment adviser, company and/or individual against whom the complaint is made.





4. Name and capacity of any individuals with the broker-dealer, investment adviser, corporation, limited partnership, etc. with whom the investor has dealt or who have relevant knowledge, e.g., the registered representative handling the account, a branch manager with whom the investor spoke, the acquaintance who persuaded the investor to invest, the friend who gave advice to the investor, etc.





5. Your investment and litigation history. Every financial institution where you have had securities or commodities accounts in the past and what types of investments you have made in the past. A description of your degree of knowledge about finance and business. This answer needs to be complete. These areas will be the major focus of the broker's discovery efforts in any arbitration.





6. Any past legal actions or written complaints made in connection with investments or other financial matters.





7. Description of the security which is the basis of the complaint, e.g., common stock of XYZ company, a 20 year church bond, an oil or gas interest or purchase of an interest in an orange grove. Footnote





8. The amount of the investment, both in dollars and in shares if applicable, and the amount of the loss you believe you sustained. It is helpful to describe how you calculated your loss.





9. When the investment was made, when the events causing the loss occurred, and when you learned of any adverse information. This is critical for analyzing the applicability of statutes of limitation.





10. The source of the securities, if you know and if it is significant. E.g., an underwriting of new shares in a public offering, a purchase from a company insider in a private transaction, purchase through a broker on NASDAQ or a stock exchange.





11. The specific things which the potential defendants said or omitted to say which the investor believes were false or misleading or the specific actions or inactions by the defendants which you believe injured you. Examples follow:

  • The account executive at the broker said that the stock of XYZ corporation, then trading at 12, was guaranteed to go to 30 within the year.
  • The investor placed a market order to sell the stock with the broker. The broker sat on the order for 4 hours before executing while the price of the stock declined 2-1/8.
  • The president of the oil and gas driller falsely said that the property had proven reserves in a certain amount.
  • The investment advisor stated that ABC company was the next Microsoft, a company with proven management and a brilliant new product, omitting to note that the company's owner was his brother-in-law whose only prior experience was working in a Dairy Queen.




12. What instructions you gave to the broker or investment advisor both orally and in writing as to investment goals and the types of investments you wanted to make, both on the new account form and otherwise.





13. Describe in detail any complaints you have made about the events in question to the broker or any agency, including copies of any letters or e-mails. Have you consulted any other attorneys on this matter ?





14. Any other facts which you believe are important and throw light on what occurred.





15. What do you think the broker will say at trial ? Put yourself in his or her shoes.





16. CHRONOLOGY OF EVENTS - Click here or scroll down for an example of what to type here.






CHRONOLOGY EXAMPLE


A very useful way to organize the facts, particularly the history of what was said and what occurred, is organize it in chronological fashion. If there has been a long history, the investor may not remember exactly how many conversations occurred or what was said in each conversation. It is still important for the investor to recall as much as is possible and to set it forth in sequential fashion. An example of a chronology follows:


time

event

early July, 1999

Felix Krull, a salesman with Superslick Securities, a Fort Lauderdale broker, cold calls. He says that every now and then exciting investment opportunities come to their attention and asks if he can call me if such a deal comes along.

July 16, 1999

Felix calls again, says that he has just learned that Cosmic Cola Company has a revolutionary new product, a self-chilling can: pop the top and it chills itself. Also, Cosmic has an agreement in principal with the Chinese government to receive exclusive distribution rights for soda pop in China. Can he put me down for $50,000 in stock ? I say that I'd like to think it over. Felix says that "the train is leaving the station." The stock is now trading at 12-1/2, and there will never be another opportunity to buy at this price. I place an order for $50,000 of stock.

Aug. 1999

Felix calls 3 or 4 more times, asking me to increase my position. The stock is now trading at 15 but Felix believes that it will "go to the moon" after the distribution agreement with China is finalized. In one of the conversations, I ask Felix to send me literature on the company, which he says he'll do, but I never receive it.

Nov. 1999

I see in the newspaper that the price of Cosmic has declined to 10-3/8. I call Felix and say that I'm feeling nervous and want to sell. Felix gets very angry and says that that would be the absolutely worst thing that I could do. He says that there has been a delay in announcing the Chinese distribution agreement but that he has confidential information that it will happen soon.

late Dec. 1999

The stock is now trading at 8-1/4. I call to sell. Felix is not there but I talk with Roberta Vesco, the office manager. Roberta argues with me for a half an hour not to sell the stock until I finally agree.

Feb. 18, 2000

The stock is now trading at 5-1/2. I finally obtain Cosmic Cola's SEC filings from EDGAR, the SEC's database on its website.

late Feb. 2000

After reviewing the SEC filings, I see that Cosmic Cola had an underwriting by Superslick Securities in early July 1999. The prospectus says that there is only a prototype of the self-chilling can and that there are uncertainties whether the commercial manufacture of the can is possible. Also, Cosmic Cola is involved in a patent dispute with Galactic Cola over the can. There is nothing in the prospectus about foreign distribution except that Cosmic has an agreement with Pipe Dream Distributors in Salt Lake City, Utah, that Pipe Dream will use best efforts to distribute Cosmic Cola in China.

March 4, 2000

I call Felix and confront him with what I've learned from the prospectus and company reports. He denies that he ever claimed that an agreement in principle for exclusive distribution in China had been reached and says that he told me that all securities had inherent risks.


back to questionnaire

DOCUMENTS FOR REVIEW


The attorney will generally need to review all of the following documents:


1. All account statements, monthly, yearly, or otherwise.


2. Any confirmations. (This is less important for an initial review if there are a number of transactions over a period of time.)


3. All agreements and account opening documents pertaining to the account. These are typically signed whenever an account is opened with a broker.


4. Any written materials the investor received about the investment, e.g., prospectuses, business plans, press releases, product information.


5. Any notes the investor made of conversations with potential defendants.


6. Any correspondence with potential defendants or with anyone else about the investment.


7. Any taped recordings the investor may have of conversations.



All content Copyright (C) 2004, John Courtade, and may not be used without explicit permission.

*Not Certified by the Texas Board of Legal Specialization [explanation]