When can I legally recover investment losses?

Victims of (offshore) bank failure and international investment fraud who know and understand the processes involved can act accordingly. It is crucial to gain correct information so that personal recovery planning is established, and the correct choices can be made. Potential loss of money and the fear of failure triggers rational and irrational behavior. Investment fund recovery follows empirical evidence and underlying theories to ensure maximization of repayment. Fraud and the thought of financial loss is difficult enough to deal with, a final deprivation can make things worse. Therefore, recovery planning should be emotionless and exclusively based on reliable and predictable strategies.

There is a difference between alleged or assumed losses and final loss. When courts are involved, loss is only determined as final when in matters of corporate disputes, the winding down of the debtor is concluded and the legal person dissolved. Personal liability and responsibility may be imposed by the court during the legal proceedings. Piercing the corporate veil that allows for personal liability of the controlling persons in a company is only allowed in exceptional circumstances. After the winding up of the company, strong cases where individual wrongdoing against an individual victim caused financial losses have a change in civil action.

Legal recovery is a practical matter that requires a rational approach. The failure of a financial institution, bank holding company or investment firm follows a strict recovery and resolution plan. Such plans are justified by several international directives and guidelines, supplemented with local regulation, frameworks and domestic law. This provides creditors with clarity over the future steps that they can expect during resolution. Since there is overlap between several indistinct and hard to fathom rules, and redirects, referrals and other combinations make an overall view on the applicable legal framework difficult to grasp.

Different and individual administrative processes to recover investment losses and account deposits allow creditors to claim part, if not all of their outstanding balance. Creditors who respect the rules for the different repayment applications, potentially come first in line have the best chances for full repayment. Such applications include initial recovery, civil action and out of court settlements, deposit protection, and liquidation procedures. The complexity of all the individual rules and the perseverance and dedication needed to bring all to a good end invites for close scrutiny of these rules to ensure risk mitigation and to maximize repayment.

The answer to the question when one can legally recover investment losses has therefore two lines of reasoning. Above all, anyone who feels wronged or victimized may file a claim against the alleged wrongdoer in court at any time. Furthermore, during the administration, resolution and recovery stages of the failure of an investment firm, there are several important steps creditors can follow. If at the end of the day a mandatory and final writedown of assets must be accepted, creditors may take the case for loss recovery to court again. However, this cannot be on the same principles as the winding up procedures, must present novel facts and prove causality between misconduct of a party and the creditor loss.