The law firm of Oakes & Fosher is presently investigating the alleged misconduct of former securities broker Charles Lynch Jr. According to his publicly available FINRA BrokerCheck report, Charles Lynch Jr. has been the subject of numerous customer disputes.
Charles Lynch Jr. was a California based securities broker. He worked in the securities industry for sixteen years. During his career, he was registered with three different securities firms. He is no longer working as a registered securities broker in any fashion.
His Registrations
- Morgan Stanley (1999-2005, 2009-2012)
- Citigroup Global Markets (2005-2009)
- Wells Fargo (2012-2016)
The Allegations
- In October 2014, a customer alleged that Charles Lynch Jr. recommended investments were not in line with their philosophy and risk tolerance. This case was settled for $334,000 in damages.
- In January 2015, a customer alleged that Charles Lynch Jr. unsuitably over-concentrated their account in the energy sector. This case was settled for $87,800 in damages.
- In August 2015, customers alleged that they had expressed to Charles Lynch Jr. that preserving their principal was their main objective. Despite this, Lynch allegedly still placed them in energy stocks far too risky for them. This case was settled for $490,000 in damages.
- In January 2016, customers alleged that Charles Lynch Jr. allegedly took risks beyond what they had expressed they wanted and that he had not properly diversified their portfolio. This case was settled for $62,000 in damages.
- In April 2016, customers alleged that their portfolio was over-concentrated by Charles Lynch Jr. in unsuitable oil and gas investments. This case was settled for $125,000 in damages.
- In February 2017, customers alleged that Charles Lynch Jr. made material misrepresentations. This case was settled for $125,000 in damages.
Charles Lynch Jr. has dozens more complaints against him with very similar allegations regarding him recommending unsuitable securities in the energy sector. Charles Lynch Jr.’s customers lost million of dollars due to these alleged recommendations. Due to all these complaints, Charles Lynch Jr. was barred by FINRA from acting as a securities broker in any fashion.
What Does This Mean?
The customers that filed claims because of Charles Lynch Jr.’s alleged actions all had conservative investment objectives that were in direct opposition with these oil and gas securities. These types of products are highly speculative due to the volatile nature of the energy market. This made them unsuitable for any customer whose main objective was protecting their principal investment. Charles Lynch Jr. allegedly recommended these products to investors he either knew, or should have known, were not financially suited for them. Brokers like Lynch can determine suitability by looking at factors like investment objectives, risk tolerance, age, liquidity needs, and financial situation. They are expected to conduct the necessary due diligence that is required to discern if an investment is suitable for a particular investor by analyzing these factors.
Many of these customers alleged that Charles Lynch Jr. not only recommended these unsuitable securities but over-concentrated their accounts in them. Over-concentration can be detrimental to investors because of how much rides on the success of a singular product. Over-concentration is unsuitable even for conservative investments because it creates an unnecessary risk. A risk that an investor might lose everything because the value of the one security they are invested in drops. For an investor to be successful, their portfolio needs to be diversified in a variety of different investments so that if one security fails, their portfolio is only slightly affected. This risk increases exponentially when an investor’s account is over-concentrated in a speculative security like these energy securities that Charles Lynch Jr. allegedly recommended to his customers.
Oakes & Fosher Can Help
Many investors are unaware of the legal recourse available to them after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may actually be entitled to damages.
Oakes & Fosher dedicates its entire legal practice to helping investors across the nation. If you, or someone you know, have lost money investing with Charles Lynch Jr., please contact Oakes & Fosher for a free and private consultation. Oakes & Fosher handles cases on a contingency basis, which means there are no fees charged unless we collect for you.
