The COVID-19 pandemic has had a severe impact on the capital
markets. The market downturn has been deep and swift. These
unfortunate circumstances increase the prospect of investor loss
litigation and regulatory action for investment dealers and
advisors. While the situation continues to evolve and dealers adapt
to the new reality of working remotely and a bear market, here are
five key issues that dealers should consider with a view to
mitigating exposure.
1. Client complaint and litigation risk
With any market correction, dealers should expect to see an
increase in client complaints and litigation as clients focus on
the decline in the value of their portfolios. Drawing on experience
from the market corrections of 2001 and 2008, taking the following
steps will help mitigate or eliminate client complaints:
