Peter Nordberg points us to an unpublished Fourth Circuit opinion upholding an expert’s testimony as to damages. Mary Lafontaine Parmenter’s investment advisor moved her $730,000 account into stock mutual funds in late 1999, increasing its value to $1.1 million at the height of the stock market bubble in 2000 (even as she was withdrawing $6000/month), whereupon it declined in value to $342 thousand. The expert argued that the most serious breach of the investment advisor’s duties came when he failed to consolidate the gains, and that losses should be counted from the peak of the account’s value. I don’t doubt that the investment advisor could have been found to be inappropriately aggressively investing Parmenter’s money; but if he was doing so inappropriately in April 2000, he was doing so inappropriately in 1999, when he made her half a million dollars; there’s something unseemly about the calculation of loss. Hindsight is nice: if the expert, F. John Hermann, could accurately forecast account value peaks, he’d be a billionaire rather than an expert-for-hire.
The opinion also reveals that the plaintiff’s attorney successfully tricked the defendant into conceding that an accurate SEC disclosure form that he had filed was inaccurate; the appeals court offered no relief because of lack of evidence that the tactic was intentional.
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Sympathizing though I do with the sense that something feels “unseemly” in this situation, it’s hard to comment further about that, without knowing more about the facts and the testimony. For instance, the expert may not have opined (and may not have rested his damage estimates on the theory) that the advisor should have precognitively anticipated future market conditions. It may be more the jury that chose that road, assuming anyone did.
“The opinion also reveals that the plaintiff’s attorney successfully tricked the defendant into conceding that an accurate SEC disclosure form that he had filed was inaccurate; the appeals court offered no relief because of lack of evidence that the tactic was intentional.”
Atta boy guys n gals, stick to the process forget truth and honesty, such don’t matter anyway does it?