Sophisticated Investors Have Rights, Too!

  • So-called “Sophisticated” investors have won investment fraud cases.
  • Investors recover losses where there has been investment fraud.
  • Sophisticated investors have legal rights too.


There is a misconception among investors that if one is sophisticated, meaning a person with knowledge of financial matters like a business owner or a CPA, one cannot prevail in an investment fraud lawsuit. Investment fraud attorney Jake Zamansky knows that’s not true.

What is a “Sophisticated” Investor?

A “sophisticated” investor is defined as a high-net-worth investor who is considered to have superior experience and market knowledge. Often sophisticated investors are confused with accredited investors.

Accredited investors are required to have a net worth in excess of $1 million to invest in certain investments. The test for who is sophisticated is much looser and more open to interpretation.

In other words, while Kim Kardashian or Paris Hilton may be wealthy investors and are qualified to put money into high-risk, alternative investments, they are hardly sophisticated.

If a brokerage firm or financial advisor makes a false or misleading statement regarding a complex investment product to a customer who is sophisticated, that is investment fraud. The customer can recover her losses in a FINRA arbitration proceeding.

Indeed, many wealthy and so-called sophisticated investors have been defrauded over the years.

A couple of examples include a Citigroup investor who recovered $54 million in a complex municipal arbitrage fund and a corporation that recovered over $5 million in a Bear Stearns hedge fund. In both of these cases, sophisticated investors proved to the FINRA arbitrators that their financial advisors lied to them about the risk of the investment products.

That brings us to today.

“Sophisticated” Investors Are Filing And Winning Cases

Currently, numerous “sophisticated” investors are filing cases against UBS seeking to recover losses incurred in the UBS Yield Enhancement Strategy ( UBS- YES) , a complex “Iron Condor” options strategy, claiming that UBS misrepresented the risk and features of the product.

Simply put, if a firm lies to an investor, it is no defense that the investor is sophisticated.

Thank goodness, sophisticated investors have legal rights, too!

Contact Investment Fraud Attorney Jake Zamansky Today If You Have Questions or Concerns About Your Options

If you are a sophisticated investor who is interested in pursuing your legal rights against a brokerage firm or financial advisor who has misrepresented the risks and features associated with various investment strategies, do not hesitate to contact investment fraud attorney Jake Zamansky as soon as possible.