Alternative Investment Fraud Attorneys

Did Ex-Coastal Equities Broker Luke Johnson Sell You GPB Private Placements, GWG Stock, REITs, or Other Alternative Investments? 

27 FINRA Lawsuits Allege Unsuitable Recommendations

Shepherd Smith Edwards and Kantas (investorlawyers.com) are investigating portfolio loss claims by former customers of ex-Arizona stockbroker Luke Michael Johnson. The ex-Coastal Equities financial advisor was suspended for 18 months by the Financial Industry Regulatory Authority (FINRA) last year after investors accused him of allegedly unsuitably recommending over $2.3M in illiquid alternative investments, overconcentrating their accounts with them, and making misrepresentations about the risks.

The investments that Johnson purportedly questionably marketed and sold to investors, while earning $132,900K in commissions, include:

• GPB Capital Holdings LPs (GPB is accused of running a $1.7B Ponzi scam.)
• American Realty Capital Hospitality Trust
• MVP REIT I
• MVP REIT II
• MacKenzie Realty Capital (A business development company (BDC))
• Priority Income Fund
• GWG Holdings Series 2 Redeemable Preferred Stock (GWG was allegedly a $1.6B Ponzi scheme.)
• MCI Preferred Income Fund II
• Cunat Multi-Family Investment Fund II

Johnson is accused of falsifying customers’ reported liquid net worth, net worth, risk tolerance level, liquidity needs, yearly income, and status as supposed accredited investors on certain documents and forms. This purportedly meant inflating figures while “dramatically” understating customers’ assets that were invested in these alternative investments. The alleged reason for this was to get around the brokerage firm’s policy, which limited customers from investing more than 35% of their liquid net worth in these kinds of investments.

Among those that were harmed were at least two senior investors seeking moderate growth that should have never been involved in these high-risk investments. For example, Johnson allegedly unsuitably recommended 14 alternative investments totaling $1.04M to one retiree. This was reportedly over 69% of the investor’s net worth. This person was forced to return to work part-time because of his portfolio losses.

In December 2022, Coastal Equities consented to pay a $150K penalty for the alleged failure to supervise a registered representative who falsified documents and neglected to tell investors when an investment it recommended was in trouble with regulators. Broker-dealers have a duty to identify red flags indicating financial advisor fraud and take the necessary steps to protect their client’s assets.

How To Recover Your GPB Private Placements, GWG L Bonds, and REIT Losses

The first place to start is to contact our seasoned alternative investment fraud attorneys to request a free initial case assessment. With more than a combined century’s worth of experience in the securities industry and securities law, Shepherd Smith Edwards and Kantas can help you determine the cause of your portfolio losses and whether you have grounds for suing Coastal Equities or any other broker-dealer.

We are currently representing other investors who suffered losses in GWG junk bonds, the GPB Funds, and various REITs and non-traded REITs. We are also looking into other losses by investors who worked with Coastal Equities brokers. In 2020, the broker-dealer reached a settlement with FINRA and agreed to pay $280K to a number of retirees and seniors over allegedly unsuitable trades.

How To Contact SSEK Alternative Investment Fraud Attorneys:

Should we agree to work with you, you will be represented by our entire securities law firm. Over the decades, more than 90% of our clients have received full or partial financial recovery.

Call our Alternative Investment Fraud Attorneys at (800) 259-9010 today.