Former stockbroker Daniel Maughan of Los Angeles, California was recently named a respondent in a FINRA complaint alleging that he churned and excessively traded a customer’s trust account at his member firm. The complaint alleges that by churning the customer’s trust account, Maughan willfully violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and also violated FINRA Rule 2020. Maughan exercised de facto control over the trust account and made all investment decisions in it, including what securities to buy and sell, the quantities of the securities to buy and sell, and when each transaction would occur. Maughan executed trades in the trust account with a principal value of all purchases and sales in excess of $70 million and the annualized cost-to-equity ratio-the percentage the account had to appreciate to break even-was 21.06. Maughan’s churning and excessive trading was quantitatively unsuitable and generated commissions and costs totaling approximately $841,000 while causing the account to incur realized and unrealized losses of approximately $812,000. Maughan also recommended qualitatively unsuitable trades in the trust account involving options and non-traditional Exchange-Traded Funds (ETFs) and an Exchange Traded Note (ETN).
If you have suffered investment losses as a result of the malpractice or misconduct of Daniel Maughan or Financial West Group, our experienced team of securities attorneys may be able to assist you in recovering some or all of your losses. Call us toll-free at 888-607-4819 for a free consultation or email us through our “Contact” page to schedule a free consultation.