Virgin Galactic (SPCE) has been recommended and sold to moderate and conservative investors in violation of FINRA and SEC regulations. These regulations require that brokers and advisors only make investment recommendations consistent with the objectives and risk tolerance of an investor. SPCE has always been an extremely risky investment.
SPCE saw its value pushed by analysts such as Morgan Stanley, who had given it an oversize price target. The stock proceeded to gain 200%. The stock crashed to Earth when Morgan Stanley reversed its analysis.
Unfortunately, smaller investors who should have never been invested in SPCE are the ones paying the price. Many investors will blame themselves for not timing the market better; however, investment suitability is not about time timing but whether the investor should have been in the investment at all. Even if an investment had or did increase in value, risky investments are not suitable for moderate investors because such investments have the substantial potential for such volatility.
Recommending such an investment to a moderate or conservative investor creates liability on the part of the broker or advisor. Such violation of industry regulations can be both negligence and fraud.
If you have lost principal in the SPCE or other speculative investments despite being a moderate to conservative investor please give us a call at 866-817-0201. You need to retain an attorney that understands the FINRA arbitration process which is different than the litigation process. Jeffrey Pederson is an attorney that has helped investors recover millions through FINRA.