GPB Capital Losses with Coastal Equities, Inc. Broker Luke Johnson
Posted on Tuesday, December 3rd, 2019 at 2:14 pm
Erez Law is currently investigating Coastal Equities, Inc. broker Luke Johnson (CRD# 3257008), who is accused of recommending unsuitable GPB Capital Holdings investments. Johnson was registered with Coastal Equities, Inc. in Scottsdale, Arizona from 2012 to 2019, when he was terminated regarding, “Registered Representative failed to follow firm policy by failing to timely forward a customer complaint to his supervisor and compliance, and by inconsistently stating a customer’s liquid net worth on client disclosure documents.”
Prior to that, Johnson was registered with Carillon Investments, Inc. in Cincinnati, Ohio and with Northwestern Mutual Investment Services, LLC in Milwaukee, Wisconsin. Johnson was terminated from Northwestern Mutual Investment Services, LLC regarding, “the representative was permitted to resign when an internal review revealed, and the representative admitted, that he signed the name of his office’s designated supervisor on four variable life insurance application forms. Signature on these forms indicates an acceptable suitability review by the supervisor.”
GPB Capital Holdings is a New York-based investment firm that offers exempt, private-placement securities. These investments inherently have a high degree of risk due to their nature as unregistered securities offerings (and without regulatory oversight). It is alleged that brokerage firms that sold GPB Capital Holdings and their brokers who recommended GPB Capital Holdings to their clients may not have conducted appropriate due diligence on the funds.
Johnson has been the subject of 15 customer complaints between 2017 and 2020, one of which was closed without action, according to his CRD report:
April 2020. “Claimant alleges unsuitable sales from December, 2016 to 2019.” The customer is seeking $150,000 in damages in this pending complaint.
April 2020. “Claimants allege that between March, 2014 and December, 2017 Coastal Equities failed to conduct adequate due diligence on certain investments and through Coastal’s representative, Luke Johnson, made unsuitable investment recommendations to the claimants.” The customer is seeking $2,329,900 in damages in this pending complaint.
March 2020. “Claimants alleges unsuitable sales from August, 2016 to October, 2017.” The customer is seeking $500,000 in damages in this pending complaint.
February 2020. “Customer alleges unsuitable investment recommendations and misrepresentation.” The case is currently pending.
January 2020. “Claimants allege that between June, 2017 and June, 2018 Coastal Equities failed to conduct adequate due diligence on certain investments and through Coastal’s representative, Luke Johnson, made unsuitable investment recommendations to the claimants.” The customer is seeking $509,000 in damages in this pending complaint.
December 2019. “Client alleges unsuitable investment recommendations and breach of fiduciary duty.” The customer is seeking $363,568 in damages and the case was settled for $22,000.
December 2019. “Claimants allege the financial adviser’s recommendations of alternative investments were unsuitable. The accounts were opened in 2016.” The case is currently pending.
November 2019. “Customer alleges unsuitable investment recommendations, misrepresentation, and breach of fiduciary duty.” The case is currently pending.
September 2019. “Claimants allege that Mr. Johnson made an unsuitable recommendation of one product in approximately 2015.” The case is currently pending. The complaint is regarding direct investments.
August 2019. “Customers allege that the management of the portfolio was negligent and that certain investments made between January 2015 and the present were unsuitable.” The case is currently pending. The complaint is regarding direct investments.
June 2019. “Claimants allege that in 2017-2018, the firm made misrepresentations and omissions of fact to claimants in soliciting the sale of certain private placement investments. Claimants also allege that the firm was negligent in not rejecting the product for sale during its due diligence process. The advisor is not named as a respondent.” The customer is seeking $750,000 in damages and the case is currently pending. The complaint is regarding direct investments.
September 2018. “Client’s attorney alleges that the financial adviser’s recommendations of alternative investments were unsuitable. Client’s attorney also alleges that three securities in the client’s advisory portfolio were unsuitable for the client. The account was opened in 2013.” The case was settled for $225,000. The complaint was regarding direct investments and common and preferred stocks.
June 2018. “Customer alleges that registered representative recommended unsuitable securities purchased in approximately 2015.” The customer sought $300,000 in damages and the case was settled for $140,000. The complaint was regarding direct investments and real estate securities.
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, Coastal Equities, Inc. may be liable for investment or other losses suffered by Johnson’s customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.