Professional Negligence Law Reporter

The Mississippi Supreme Court held that a lawsuit brought by investors whose retirement accounts suffered significant losses due to an advisor’s alleged mishandling of their assets was untimely under the state’s “catch-all” limitations statute, Miss. Code Ann. §15-1-49.

From 2002 to 2005, investors rolled much of their retirement assets over to Morgan Keegan financial advisor Steven Savell, who allegedly assured the investors that their principal would grow over time and that their assets would be invested in order to provide them lifelong income. Savell allegedly recommended that the investors invest in two penny stocks, marking the purchases as unsolicited. He also purchased long-term annuities, which he advised the investors to cash out early in order to purchase new annuities. The investors’ accounts suffered substantial losses, which were reflected in monthly and year-end account statements. Savell, when questioned about the losses, allegedly assured the investors that everything was alright and encouraged them to stay the course.

Savell left Morgan Keegan in 2013 when it was acquired by Raymond James & Associates. In 2015 and 2016, the investors learned an arbitration claim had been filed against Raymond James for Savell’s mishandling of client accounts. In 2017, the investors sued Raymond James, Savell, and a branch manager, alleging liability for the mishandling of their retirement accounts. The trial court granted the defendants summary judgment, finding the plaintiffs’ claims time-barred. An intermediate appellate court reversed.

Reversing, the state high court found that under the state’s catch-all limitations statute, §15-1-49, the three-year limitations period begins to run when a cause of action accrues. The court added that accrual is when the right to sue becomes vested, except in cases involving latent injuries. The court found that the plaintiffs had not presented evidence of concealment on the defendants’ part. To the contrary, the court said, by the end of 2008, the plaintiffs had become aware, through their account statements, that they had sustained nearly total loss from Savell’s purchase of the penny stocks. Citing the trial court, the court found that it did not require an advanced degree or a financial background to understand that the statements showed investment losses inconsistent with the plaintiffs’ stated financial objectives.

Thus, the court affirmed the trial court’s judgment, concluding that the plaintiffs should have learned of the alleged malfeasance and brought suit within three years.

Citation: Baker v. Raymond James & Assocs. Inc., 312 So. 3d 720 (Miss. 2021).