O'Connor v. R. F. Lafferty & Co., Inc.
United States Court of Appeals for the Tenth Circuit
965 F.2d 893 (1992)
Carol O'Connor (plaintiff) invested her entire divorce settlement with R. F. Lafferty & Co. (defendant) through broker Roy Foulke, a family friend who knew O'Connor depended on the account as her sole income; after a decade managing her account, Foulke invested in an oil company and a pharmaceutical company, both of which lost significant value, leading O'Connor to sue, claiming the investments were unsuitable given her objectives. The district court ruled for Lafferty, and O'Connor appealed.
Whether investments a broker made for a client relying on the account for income were unsuitable, where the broker conducted thorough due diligence and there is no evidence of intent to defraud or reckless disregard of the client's objectives.