Liability as a Registered Investment Adviser?

Discussion in 'Professional Trading' started by RobertPowers, Sep 1, 2005.

  1. Does anyone know,

    If I am a registered investment advisor, actively managing my client's account (that is, trading the account for him/her), as long as I described the risks beforehand, and not deviated from the trading method I described to him/her, is there any way I could be liable if I lose my client money? Could I potentially be sued?

    And, if so, should I form an LLC or something like that to limit my liability?
  2. How i do:

    Form LLC as an umbrella to house all trading limited and general partnerships, up to 25. Being able to match partners money is key.

    Otherwise, if you plan to trade other people's money without including your money then become an RIA. To prove RIA liability will take a resourceful and wealthy client so as long as you keep them updated and they stay the course there is little that can happen to you. Although there are ways where you could be materially hurt going forward if they can prove you misled them with erroneous information. But, i am no expert in the matter so checking with an attorney and state regulators is best.

    Good Trading.