Soreide Law Group Files Lawsuit Against Edward Jones For Failure to Supervise Due to Allegations of Over-Concentration of High-Risk Oil Stocks

Soreide Law Group recently filed a lawsuit on behalf of their clients against EDWARD D. JONES & CO. for failing to supervise broker, Kristopher Lee McKoin of Bastrop, Louisiana.
The Claimants, a couple from Louisiana who are both in their 70’s, were looking to maintain a conservative portfolio with the primary goal being to preserve their capital and live off the income generated from their investments to sustain them through their retirement.
The lawsuit alleges that in or about 2013, the EDWARD JONES broker, Kristopher Lee McKoin, began over-concentrating the Claimants accounts in oil and gas investments.  The Claimants were wholly reliant upon McKoin for all of their investment advice and followed his recommendation to invest a large portion of their accounts into Linn Energy and Seadrill.  Linn Energy filed bankruptcy with the decline in the oil market, and with the additional losses sustained in Seadrill, the Claimants have lost approximately $200,000.
This concentration of energy investments in the Claimant’s accounts were over 50% with no hedging strategy or downside protection.  McKoin was confronted several times by the Claimants concerning the losses and high concentration in oil and gas related investments.  McKoin advised that the Claimants continue to hold and he allegedly told them they were great investments. The buy and hold strategy in highly sensitive commodity driven stocks is unsuitable for senior citizens who are looking to generate a stable income through retirement.  Over concentrated positions in oil investments is totally unsuitable for senior citizens. Oil historically is extremely volatile.
The Claimants having now suffered devastating losses to their irreplaceable retirement savings, have no other means of replacing their principal loss and the lost stream of future income to support themselves through retirement.  The lawsuit alleges that no one from EDWARD JONES ever made an attempt to build a diversified portfolio to protect the Claimant’s retirement savings. There was also no hedging or stop loss strategy implemented in the account and the Claimant’s account was over-concentrated on one idea that has now cost the Claimants over $200,000 of their irreplaceable retirement savings.
The lawsuit also alleges that a broker/dealer or registered representative must have reasonable grounds to believe that a recommendation to purchase, sell or exchange a security is suitable for the customer. This analysis has two principal components. First, the reasonable basis suitability analysis, requiring the broker/dealer to have a reasonable basis to believe that the recommendation is suitable for at least some investors. Second, the customer specific suitability analysis requires that the broker determine whether the security is suitable for the customer to whom it would be recommended. The broker must take into consideration the customers net worth, age, tax status, and investment objectives. The broker must “know his client.” The Claimants were not looking to speculate with their retirement savings and allegedly EDWARD JONES constructed an overly concentrated portfolio into volatile, high-risk investments despite the Claimants’ need of safe, conservative income and growth investments to sustain them through retirement with no hedge, stop loss, or any form of downside protection.
This lawsuit alleges negligence, breach of fiduciary duty, negligent supervision, and breach of contract.
EDWARD JONES and their representative’s actions have allegedly caused Claimants damages of approximately $200,000.00.
If you or a loved one were clients of EDWARD D. JONES & CO., and/or broker Kristopher Lee McKoin in Bastrop, Louisina, and also experienced losses by over-concentration in high-risk energy related stocks, call Soreide Law Group and speak to an attorney regarding the possibility of recovering your losses at:  888-760-6552.
Soreide Law Group represents clients nationwide before FINRA and operates on a contingency basis.