The Investors’ Control of Their Investment Advisers. Who Has the Final Word?

TAMAR FRANKEL

BU Law emerita professor Tamar Frankel discusses an emerging issue affecting financial advisers—when a client may exercise control over the actions of the adviser. Frankel relates the story of an investment adviser that did not follow the client’s orders to cease certain investments, at a cost of almost $5 million to the client. As Frankel explains, the Securities and Exchange Commission (SEC) got involved, resulting in the investment adviser’s settlement for a significant payment to the client and other conditions.

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MSPA Claims 1, LLC v. Kingsway Amigo Insurance Company

Docket: 18-14980

Opinion Date: February 13, 2020

Judge: Newsom

Areas of Law: Insurance Law, Personal Injury, Public Benefits

Of two people injured in a car wreck in April 2012, one was a Medicare beneficiary who received her benefits from an MAO-Florida Healthcare Plus, which later assigned its claims to appellant MSPA Claims 1, LLC. The other party involved in the accident was insured by appellee Kingsway Amigo Insurance. The Medicare beneficiary obtained medical treatment for her accident-related injuries between April 29, 2012 and July 26, 2012, and Florida Healthcare made $21,965 in payments on her behalf. On March 28, 2013, the beneficiary settled a personal-injury claim with Kingsway and received a $6,667 settlement payment. The issue this case presented for the Eleventh Circuit’s review centered on the timeliness requirement with which the government had to comply as a prerequisite to filing suit to seek reimbursements that it made on behalf of the Medicare beneficiary, and whether filing suit beyond a statutory three-year period beginning on the date on which medical services were rendered was fatal to the government’s claim. The district court held that MSPA’s claim was stale because it didn’t comply with what the court (somewhat confusingly) called “the three-year limitation requirement.” The Eleventh Circuit disagreed and reversed. “The Medicare Secondary Payer Act’s private cause of action, and our cases interpreting it lead us to conclude that the Act’s claims-filing provision, doesn’t erect a separate bar that private plaintiffs must overcome in order to sue. A closer look at the claims-filing provision’s text and the Act’s structure confirms that conclusion. Accordingly, the district court erred in granting Kingsway’s motion for judgment on the pleadings.”