Coastal Equities To Pay $280K In FINRA Arbitration Claim Over Retiree Losses

Coastal Equities Has Been The Subject of $3M in Investor Arbitration Claims

Coastal Equities, a mid-sized broker-dealer, recently arrived at a settlement with the Financial Industry Regulatory Authority (FINRA) in which it agreed to give $280K in restitution to several customers. The firm is accused of failing to reasonably supervise one of its registered representatives, who recommended trades that were allegedly excessive and unsuitable. Those who were harmed were retirees and senior investors.

It was just last year that Coastal Equities said in its filing with the US Securities and Exchange Commission (SEC) that investors had submitted $3M in arbitration claims against the firm.

At Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com), our FINRA attorneys represent retail investors, including retirees and seniors, institutional investors, and high net worth individual investors in recovering the losses they suffered because of the actions or poor advice of their financial advisor.

Senior Investors Paid Tens of Thousands of Dollars in Commissions Over Recommendations

According to the Letter of Acceptance, Waiver of Consent in this latest FINRA case, the Coastal Equities stockbroker made unsuitable trade recommendations between 2016 and 2018. In addition to its purportedly inadequate supervision, the firm is accused of noticing red flags indicating such activities by this financial advisor but chose to generally disregard them.

The customers that were harmed by the allegedly unsuitable trading included:

A 75-year-old retiree who paid over $84K in commissions based on more than 100 trades that the Coastal Equities broker recommended.
A married couple, both retirees. The Coastal Equities registered representative is accused of unsuitably recommended to them that they buy securities using margin. They paid over $97K in commissions.
A 91-year-old customer who also was recommended to use margin to invest. This elderly investor paid more than $61K in commissions.
An 82-year-old senior investor who paid $14K in commissions.

In its January 2019 filing with the SEC, Coastal Equities reported that it was either a co-respondent/ respondent in FINRA arbitration claims totalling $3M, most of them alleging unsuitability, or was currently in talks with customers threatening to file cases.

Not Enough Proper Supervision Around Trades

Last year, FINRA said in a report that there were some firms that did not have the proper supervisory systems in place for identifying warnings when unsuitable transactions had occurred. It is a broker-dealer’s duty to properly supervise not just their registered representatives but also the latter’s activities and recommendations in customers’ accounts.

Brokerage firms like Coastal Equities can be held liable for damages if inadequate supervision allowed for investment losses, including those caused by excess commissions.

Elderly Financial Abuse and Fraud

Losing a significant amount of money due to stockbroker fraud or negligence can lead to serious financial ramifications for any investor. This is especially true for many retirees and senior investors who may no longer have an active source of income and are dependent on the funds in their portfolio and other savings.

Our elderly investor fraud lawyers at SSEK Law Firm have been fighting for seniors to recover their losses through arbitration, mediation, or litigation for thirty years. If you worked with a Coastal Equities broker who you feel was responsible for your investment losses, call us at (800) 259-9010 right away to request your free, no-obligation case consultation.