Case Study: Financial Advisor’s Deceit Costs Couple Their Retirement and the Court Awards $50K for Distress
- Justeen Dormer
- 6 days ago
- 2 min read
Professional Negligence
What happens when a financial advisor does more than just get it wrong? In this case, a couple’s retirement savings vanished with their advisor, who disappeared for nearly five years. The court found his actions were not just negligent, but deliberately deceitful. The couple suffered serious emotional distress as they faced an uncertain retirement, and the court awarded them $50,000 in general damages. This case shows that when financial misconduct is intentional and harmful, the law can go beyond the balance sheet. Emotional harm matters too, especially when the stakes are as personal as your future.
The Background:
A couple had entrusted their retirement funds to a financial adviser, believing they were receiving professional investment advice. Instead, they endured nearly five years of silence, unable to contact him or determine where their money had gone.
As they neared retirement, the couple suffered immense stress, uncertainty, and emotional hardship. They were left facing the possibility of growing old without financial security, a situation they described as "ongoing fear" and “psychological pressure.”
The Legal Issue:
The court considered whether damages for mental anguish and distress could be awarded where the harm stemmed from deceit and misleading or deceptive conduct, rather than physical or psychiatric injury.
While damages for distress are generally not available in negligence cases, the judge accepted that such damages can be awarded in cases involving tortious deceit and statutory misleading conduct which had occurred in this case.
The Decision:
The court found the financial advisor's actions were not merely negligent but deliberately deceitful, taking the couple’s savings and misapplying them for his own benefit. It was reasonably foreseeable that this would cause significant emotional distress, especially as the couple approached retirement.
In assessing the harm, the judge noted this was not a case for “token” damages. The distress was real, ongoing, and deeply personal. Despite the couple later recovering some of their money through other legal channels, the court awarded $25,000 each in general damages for the distress caused.
Key Takeaway:
This case highlights that where financial misconduct involves deceit or misleading behaviour, courts can and do recognise the emotional toll, particularly where clients are vulnerable or approaching retirement. It reinforces the importance of holding financial professionals to account, and the legal system’s capacity to acknowledge harm beyond pure dollars and cents.
When a financial adviser vanished with a couple’s retirement savings, the court awarded $50,000 for emotional distress. If misconduct has harmed you, contact Dormer Stanhope for legal advice today.
