What to Do When Your Stockbroker Recommends Unsuitable Investments
The law firm of Oakes & Fosher is presently investigating the alleged misconduct of securities broker John Kevin Egan, who recommended unsuitable investments to clients. According to his publicly available FINRA BrokerCheck report, John Egan has been the subject of multiple customer disputes over the course of his career.
John Egan is a California-based securities broker. He had worked in the securities industry for twenty-eight years. During his career, he had been registered with two different securities firms. He is longer working as a securities broker in any fashion.
- Baraban Securities (1992-1996)
- Western International Securities (1996-2021)
John Egan’s career in securities has been marred by numerous allegations from different clients, discussed in detail below.
- In July 2022, a customer alleged that John Egan had recommended unsuitable investments. This case was settled for $50,678 in damages.
- In August 2022, a customer alleged that Egan had recommended unsuitable investments. This case was settled for $13,166 in damages.
- In November 2022, a customer alleged that Egan had recommended unsuitable investments and misrepresented material facts regarding investments. This case is pending, and the customer seeks $50,000 in damages.
- In February 2023, a customer alleged that Egan had managed their investments negligently and misrepresented material facts regarding investments. This case is pending, and the customer seeks $5,000 in damages.
- In July 2023, a customer alleged that Egan had recommended unsuitable investments and breached his fiduciary duty. This case is pending, and the customer seeks $127,500 in damages.
Before describing what classifies an investment as “unsuitable,” it’s beneficial to define what makes one “suitable.” A suitable investment aligns with an investor’s risk tolerance, financial goals, and overall investment strategy. For example, a young investor with a high-risk tolerance might be more inclined to invest in volatile stocks, while an older investor nearing retirement might choose less risky investments like bonds.
On the other hand, unsuitable investments are those that do not align with an investor’s risk tolerance, financial goals, or investment strategy. These investments can lead to unnecessary losses and damages for the investor. In John Egan’s case, he is accused of recommending unsuitable investments to clients, leading to significant financial harm.
A Securities Broker’s Duty
Securities brokers have a duty to their customers to always act in their best financial interests. This is their duty as a fiduciary. This means brokers can only recommend investments their customers are suited for.
Brokers like John Egan can determine if a particular investment suits their customers by looking at various factors provided to them, such as the following:
- Investment objectives
- Financial situation
- Liquidity needs
- Risk tolerance
Brokers who recommend investments contrary to these needs have either done so in a fraudulent manner, placing their financial interests ahead of their clients or in a negligent one. Regardless if the broker’s intent was fraudulent or negligent, managing a customer’s account unsuitably disqualifies them from the ability to perform their duties in the required manner.
Did Your Stockbroker Recommend Unsuitable Investments? Oakes & Fosher Can Help
Many investors are unaware of the legal recourse available after losing money due to securities broker fraud and/or negligence. The truth is that investors who have lost money in this fashion may be entitled to damages.
Oakes & Fosher dedicates its entire legal practice to helping investors nationwide. If you, or someone you know, have lost money investing with John Egan, please contact our securities fraud attorneys for a free and private consultation. We handle cases on a contingency basis, which means no fees are charged unless we collect for you.