The law firm of Oakes & Fosher is presently investigating the possible misconduct of former securities broker Daniel Maughan. According to his publicly available FINRA BrokerCheck report, Daniel Maughan has been the subject of multiple customer disputes.

Daniel Maughan was a California based securities broker. He worked in the securities industry for nineteen years. During his career, he was registered with five different securities firms. He is no longer working as a registered securities broker in any fashion.

His Registrations

  • Merrill Lynch (1997-2001)
  • Metropolitan Life Insurance Company (2001-2002)
  • MetLife Securities (2001-2002)
  • Wedbush Securities (2002-2010)
  • Financial West Group (2010-2017)

The Allegations

  • In March 2001, a customer’s daughter alleged that Daniel Maughan executed unauthorized trades. This was because her father did not have the present mental capacity to comprehend any conversations regarding his finances. This case was settled for $51,321 in damages.
  • In December 2002, a customer alleged that Daniel Maughan churned their account, executed unauthorized trades, and recommended unsuitable securities. This case was settled for $46,000 in damages.
  • In July 2009, a customer alleged that Daniel Maughan breached his fiduciary duties, made negligent misrepresentations, handled their account negligently, engaged in fraud, converted their funds, failed to follow instructions, breached contract, made an unauthorized purchase, and gave them unsuitable advice. This case was settled for $10,000 in damages.
  • In September 2015, a customer alleged that Daniel Maughan breached his fiduciary duty, handled their account negligently, breached contract, and made material misrepresentations. This case was settled for $550,000 in damages.
  • In August 2019, Daniel Maughan was sanctioned by FINRA. The findings in this matter state that he churned a customer’s trust account generating commissions for himself and additional costs to the customer that totaled $841,000. Daniel Maughan’s alleged churning also caused the customer to incur additional trading losses of approximately $812,000 in damages. According to the findings, Daniel Maughan also recommended highly unsuitable securities in the trust account like derivatives and non-traditional Exchange-Traded Funds. This sanction is presently pending.

Unauthorized Trading

Securities brokers are required to obtain their customers’ authorization before executing trades on their behalf. This is because investors are entitled to the opportunity to decide for themselves if they want to be invested in a particular security. There is a practice known as discretion where a securities broker can execute trades in a customer’s account without having to obtain their authorization for every trade. However, before a broker can begin exercising discretion, they first must receive express written authorization from the customer to do so. They must also have their member firm accept the account as suitable for discretionary trading. However, securities brokers with discretionary trading authority over a customer’s account can often take things too far. Since they do not need to obtain their customer’s authorization before executing trades, they can often trade the account excessively for long periods of time before getting caught.

Churning

Some less than scrupulous securities brokers will trade their customers’ accounts excessively even if there is no financial benefit to the customer. The main reason that brokers do this is because it generates additional commissions with each trade they execute. When a securities broker excessively trades their a customer’s brokerage account with the express purpose of increasing their commissions, they have engaged in a fraudulent trading practice known as churning. Securities brokers are obligated to always act in the best interests of their customers; however, there are still some less than scrupulous securities brokers who place their own financial interests ahead of their 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 all across the nation. If you, or someone you know, have lost money investing with Daniel Maughan, 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.