Oakes & Fosher is presently investigating the possible misconduct of former securities broker Donald Preston. According to his publicly available FINRA BrokerCheck report, Donald Preston has been the subject of a FINRA sanction.
Donald Preston was an Ohio based securities broker. He worked in the securities industry for twelve years. He spent his entire career working as a registered broker for PFS Investments. He is no longer working as a registered securities broker in any fashion.
Donald Preston was officially sanctioned by FINRA in June 2018. The findings in this matter state that he recommended variable annuity exchanges, as well as a mutual fund investment, to one of his customers without having a reasonable basis to believe that these investments were suitable. The findings go on to state that Donald Preston knew that his customer was unemployed and would have to be at the ready to liquidate assets in order to pay for his living and medical expenses. Despite this, Donald Preston allegedly recommended to him that he trade his current variable annuity for a different variable annuity. The new annuity came with higher fees and expenses than the previous one.
The findings go on to say that Donald Preston then recommended to the customer that he withdraw $100,000 from his variable annuity and invest it in Class A shares of an IRA mutual fund. Class A mutual fund shares are, by design, meant to be long term investments as the transactions are accompanied by large commissions and fees. Donald Preston’s customer had already made him aware of his need to be able to liquidate assets for living expenses.
Donald Preston’s member firm approved the investment due to him allegedly falsifying statements regarding the customer’s liquidity needs and source of funds.
Due to these alleged actions, Donald Preston was forced to pay $10,000 in fines, $1,427 in disgorgement, and $3,515 in restitution. He was also suspended by FINRA from acting as a securities broker in any fashion for a period of six months. He was permitted to resign from PFS Investments two years prior to the FINRA sanction when the allegations first came to light.
What Does This Mean?
Securities brokers, like Donald Preston, have an obligation to their customers to only recommend securities that they (the customers) are actually suited for them. Securities brokers are expected to conduct the necessary due diligence that is required to determine suitability by analyzing a customer’s financial situation, liquidity needs, and investment objectives. Donald Preston’s customer had very high liquidity needs and a diminishing financial situation; however, Preston allegedly still placed the customer in incredibly illiquid securities which allegedly caused him to incur hefty charges due to the unnecessary annuity switches.
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 of the matter 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 Donald Preston, 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.