Erez Law is currently investigating Edward Jones & Co. financial advisor Kristopher Lee McKoin (CRD# 4071659) over recommendations for high yield energy investments tied to the volatile energy sector. McKoin has been an employee of Edward Jones for the past 17 years at their Bastrop, Louisiana office.
According to information obtained by Erez Law, an elderly couple from Louisiana filed a FINRA arbitration claim against McKoin. The couple was allegedly looking to maintain a conservative investment portfolio, preserve their capital, and live off the income generated from those investments and sustain them throughout their retirement years. The couple entrusted financial advisor Kristopher Lee McKoin to recommend and manage their modest investment portfolio and make recommendations to invest in safe investments that would generate income without losing their principal. The claim alleges that McKoin overconcentrated the customer’s accounts in high risk oil and gas stocks in the energy sector, which were grossly unsuitable for their investment goals.
McKoin’s former customers allege that he recommended a reckless and unsuitable concentration of more than 50% of their investments in speculative energy sector stocks. In 2013, the couple invested in Linn Energy and Seadrill; Linn Energy has since filed for bankruptcy with the decline of the oil market. The couple lost $200,000 of irreplaceable retirement savings. The volatile energy sector experienced significant turmoil, and Linn Energy and other energy companies were negatively impacted when global crude oil prices fell below $40 per barrel at the end of 2015. This was the lowest level since early 2009, as supply was in excess of global demand.
Investments in Linn Energy and similar stocks in the volatile energy sector were not suitable for the couple’s goals to generate income without losing their irreplaceable retirement savings. The former Edward Jones customer suffered devastating losses to their principal, as well as future streams of income that would have sustained them throughout their retirement years.
McKoin’s former customers allege that he, nor anyone from Edward Jones Co., made an attempt to diversity their portfolio to protect their irreplaceable retirement savings. This reckless and unsuitable strategy exposed the clients to companies that were vulnerable to the same adverse market conditions and experiencing significant financial distress, and ultimately resulted in devastating losses.
A broker must have reasonable grounds for each recommendation made to investors considering such factors as the customer’s other securities holdings, financial situation, and risk tolerance. In addition, before a firm offers a security to its customers, the firm must conduct due diligence, investigating the facts surrounding the security, to confirm that it is suitable for any customer of the firm. The suitability of an investment for a particular individual is at the center of the investment process and one of the key duties owed by a firm and its broker to the customer. A firm may be held liable for its failure to recommend suitable investments to its customers.
In addition, pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, Edward Jones Co. may be liable for investment or other losses suffered by McKoin’s customers.
Erez Law represents investors in the United States for claims against Edward Jones Co. financial advisor Kristopher Lee McKoin, who is alleged to recommended a speculative, unsuitable and concentrated investment strategy of high risk oil and gas stocks in the energy sector.
Erez Law can help you recover losses you suffered as a result of unsuitable high yield energy investments. If you were a client of Edward Jones Co. financial advisor Kristopher Lee McKoin or another firm and have experienced investment losses or financial irregularities, please call us at 888-840-1571 or complete our contact form. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies.