FINRA Suspended Coastal Equities’ Luke Johnson For Bad Investment Advice

Investors might have sustained losses because of securities broker Luke Michael Johnson [CRD: 3257008, Scottsdale, Arizona]. Johnson worked for Coastal Equities Inc. from April 3, 2012, to December 13, 2019. Below, you'll find information about some investor disputes concerning Johnson. You'll also learn more about a recent FINRA case where the regulator sanctioned him for unsuitable recommendations.

Johnson Sanctioned By FINRA For Unsuitable Recommendations

Specifically, on February 1, 2024, FINRA issued an Order Accepting Offer of Settlement, Case No. 2019061213402, against Luke Johnson, stemming from allegations of unsuitable recommendations of illiquid alternative investments.

Namely, Johnson, during his association with Coastal Equities Inc., was implicated in recommending over $2.35 million in illiquid alternative investments to nine clients, ranging from April 2015 through May 2018.

Supposedly, he over-concentrated clients' portfolios in high-risk, illiquid securities, without proper consideration of their investment profiles, which included their needs, financial situation, investment goals, and risk tolerance. His actions were found to be in violation of FINRA Rules 2111 and 2010, which require that recommendations made by brokers to their clients must be suitable based on the client's investment profile.

Additionally, Johnson or his assistants falsified documents Including client account information forms and investment subscription agreements, to misrepresent these clients' financial conditions. This included inflating net worth and liquid net worth figures to get around Coastal Equities Inc.'s internal policies regarding investment concentration.

In response to these findings, FINRA's sanctions against Johnson include an eighteen-month suspension from associating with any FINRA member firm in any capacity. Moreover, Johnson has been fined $15,000 and ordered to pay restitution totaling $21,797.30 to affected clients.

Coastal Equities Inc. Investor Accused Luke Johnson Of Unsuitable Recommendations

Also, on October 31, 2023, a Coastal Equities Inc. client filed FINRA Arbitration: 23-03138 about Luke Johnson. Supposedly, Johnson made unsuitable recommendations. Because of this, the client allegedly sustained damages on alternative investments. As a result, the client requested $225,000 in compensation from Coastal Equities Inc. or Johnson. Evidently, this arbitration is pending a resolution.

Unsuitable Recommendations Relating To DPPs and LPs

On June 9, 2023, FINRA Arbitration: 23-01700 was filed about Johnson. Mainly, the client claimed that he recommended unsuitable direct investments, causing alleged damages of $117,922.90. This case is pending resolution.

Luke Johnson’s Client Alleged Losses Due To Unsuitable Alternative Investments

In another instance, on April 17, 2023, Johnson faced allegations of sales practice violations. This includes recommending unsuitable trading in direct participation programs or limited partnerships, with claimed damages amounting to $190,000. FINRA Arbitration: 23-01020. This complaint is also awaiting a decision.

Seeking Recourse For Investment Losses Because Of Luke Johnson

Did you experience losses because of Luke Johnson? Reach out to Soreide Law Group online or at (888) 760-6552 to discuss potential recovery of your investment losses. Soreide Law Group, aiding investors across the United States on a contingency basis and advancing all costs, is prepared to evaluate your case. Johnson and the firms he worked for deny allegations of sales practice violations.