Coastal Equities Inc., without admitting or denying FINRA’s findings, consented to the sanctions and to the entry of findings that it failed to reasonably supervise a registered representative who recommended excessive and unsuitable trades in four client accounts. FINRA also stated that each client was a retired senior investor with a moderate risk tolerance.
According to an article in InvestmentNews, Coastal Equities is a mid-sized broker/dealer with 104 registered representatives. On November 9, 2020 they agreed they would pay back the $280,000 in restitution to the clients for allegedly failing to supervise a series of unsuitable trades in the elderly clients’ accounts.
The representative, according to FINRA, was not properly supervised from 2016 to 2018. The name of the advisor who executed the trades, and who was registered with Coastal Equities from September of 2015 to July of 2018, was not disclosed. FINRA also censured the firm.
According to FINRA, from October of 2016, the Coastal Equities’ daily trading blotter showed the frequent trading of the registered representative and the high turnover rates and commissions in the accounts of the four senior clients.
Allegedly, FINRA states, despite the red flags, from October of 2016 through December of 2017, no one at Coastal Equities reviewed the clients’ accounts to determine if the registered representative’s recommendations were suitable. Additionally, according to FINRA, no one allegedly questioned the representative about trading in the client accounts, contacted any of the clients, nor took steps to reduce the commissions the representative was charging the clients and frequency the representative recommended securities transactions.
According to the InvestmentNews article, Coastal Equities, in a recent filing with the SEC, stated that investors have filed arbitration claims seeking in approximately $3 million in damages.
If you or an elderly family member have suffered losses due to the actions or recommendations of Coastal Equities Inc., contact Soreide Law Group and speak to an experienced securities lawyer at no cost regarding the possible recovery of your investment losses through a FINRA arbitration at: 888-760-6552.
Soreide Law Group works on a contingency fee basis and represents clients nationwide before FINRA.