Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker John Egan (Egan), previously associated with Western International Securities, Inc., has at least 6 disclosable events. These events include 6 customer complaints, alleging that Egan recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $5,000.00 on September 06, 2024.
Customer alleges that an investment recommendation was unsuitable.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $50,000.00 on August 29, 2024.
Customer alleges that an investment recommendation was unsuitable and misleading.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $380,000.00 on June 10, 2024.
Customers allege that investment recommendations were unsuitable and misrepresented. Dates of activity from October 2017 to June 2020.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $60,000.00 on November 13, 2023.
Violations of Federal Securities Laws, Unsuitable Recommendations, Misrepresentations and Ommission of Material Facts.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $50,000.00 on August 28, 2023.
The representative misrepresented the features of the product sold in 2020.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $127,500.00 on July 27, 2023.
Unsuitable recommendations, breach of fiduciary duty.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. Reg BI applies when brokers recommend a retail investor engage in securities transaction or an investment strategy involving one or more securities. Reg BI also applies to financial advice concerning the transfer of funds and opening of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Using the foregoing information, the associated person then must consider reasonably available investment option to accomplish the investor’s goals as well as alternative investment options that may be cheaper or other important qualities. Finally, the advisor must conclude that there is a reasonable basis to believe that the recommendation being provided is in the investor’s best interest.
An advisor must understand the type of account, securities, and their client in order to meet their care obligations. The type of securities account has the potential to greatly affect retail customers’ costs and investment returns. Different types of securities accounts can offer different features, products, or services, and not all types of accounts or services would be in every investor’s best interest.
Egan has been in the securities industry for more than 28 years. Egan has been registered as a Broker with Western International Securities, Inc. since 1996.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
