ORLANDO, Fla. -- Edward J. Niemiec doesn't know where the trail is going to lead him, but he is one of the latest of a growing number of former stockbrokers who have soured on the industry and become consultants to battered investors.
Mr. Niemiec, who spent 22 years in the securities industry in jobs ranging from sales to management and compliance-regulation jobs, has turned his attention to helping wronged investors recover losses though his Securities Recovery Consultants, based in Maitland, Fla.
After placing newspaper ads with a headline asking, "Victimized By Your 'Trusted' Stockbroker?" Mr. Niemiec confessed that some of the initial responses to the ads were from broker acquaintances wanting to know, "Ed, what are you doing?"
Mr. Niemiec's answer is that he is not going against the industry -- only the wrongdoers in it who would churn an account, put conservative clients in unsuitable investments or make unauthorized trades designed to make commissions for themselves rather than profits for their clients.
In the first week after placing the small ad in June, Mr. Niemiec said, he advised one caller that he didn't have a legitimate beef, made appointments to hear three other cases and talked with the daughter of an elderly investor whose financial planner has worked her nest egg from $200,000 to about $10,000 in two years. Although the investor still thought highly of the planner, Mr. Niemiec said, the daughter wanted to know a little bit more about where the money went.
Neither a lawyer nor an accountant, Mr. Niemiec expects to get a lot of cases that retail securities lawyers won't touch because they are too small or too tough to win. His services include weeding out facts from fiction, referring clients to experts in various fields, leading them to the proper regulatory agencies and doing the paperwork involved.
Mr. Niemiec said he changed sides in the battles between brokers and clients because of a growing disenchantment with the industry and because "I knew there were a lot of people who got burned but didn't know where to go and what to do."
Bob Dyer, an Orlando retail securities lawyer who has used Mr. Niemiec as an expert witness in court cases against brokerages, says recovery consultants are cropping up in different parts of the country.
While account churning and excessive trading were the most common complaints of badly burned investors in the 1980s, Mr. Dyer says, retail securities litigation in the 1990s has turned in the direction of "junk bonds," limited partnerships and the charge that entire portfolios are unsuitable to accomplish the clients' goals.