question archive Benson Ang is a professional financial advisor with 20 years of experience
Benson Ang is a professional financial advisor with 20 years of experience
Subject:FinancePrice:2.86 Bought11
Benson Ang is a professional financial advisor with 20 years of experience. Three years ago, he convinced retiree Samuel Cheng and his wife to invest their life savings in a China-based company, Xing Li Enterprises, promising them huge returns on their investments after three years.
Initially, Samuel and his wife were a little uncertain about investing all their money in this China company, but Benson said that he had already done all the necessary research and that Xing Li Enterprises was a China-government-backed company with global investments. He also assured Samuel and his wife that the Chinese government had “guaranteed all investments” and therefore they had nothing to lose.
In fact, Benson did not do any research on Xing Li Enterprises; he was just keen on getting Samuel and his wife to make the investment, which would then entitle him to obtain a huge commission as a professional financial advisor. Recently, due to the trade war between the China and the United States, Xing Li Enterprises collapsed and all those who invested in the company lost their investments, including Samuel and his wife. When Samuel contacted Benson about the losses, Benson simply said that he was not liable given the uncertainty of the investment markets.
Required:
Advise Samuel and his wife if they can hold Benson Ang liable for their losses. ( Total 450 words)
Purchase A New Answer
Custom new solution created by our subject matter experts
GET A QUOTE
Answer Preview
As we know that financial advisor has fiduciary relation with their client that means he should provide all required information correctlu to client who make investment according to him.Financial advisor cannot breach the trust for personal benefits which effect the investment of client and he suffred.If financial advisor involve in any fraud activity he can be sued by client and make responsible for losses.Financial advisor can also be sued for his negligence which contribute loss to his client.
In the given Case Benson Ang a financial advisor of client convince samuel cjang and his wife to invest in chinese company Xing Li Enterprise for investment and said that this company will provide handsome return after 3 years when Samuel chang and wife does not feel their investment he explained that according to his expenditure the company is govt backed so their investment is secure and no chance for loss for their personal benefit of earnings huge interest.Advisor does not conduct any research that means he breach the fiduciary relation with their client and due to this client suffer huge loss as the company Xing Li Enterprise.So in this case Samuel chang has right to sue financial advisor for their losses because such losses is arises due to false statement of advisor as well as for receiving undue advantages to receive commission which is not valid according to law.
