Dan Maughan: Ex-Financial West Group Rep Barred Over ETFs, Suitability

Former Los Angeles broker/adviser Dan Maughan (CRD# 2561363) was recently the subject of a Financial Industry Regulatory Authority sanction which barred him after finding he churned a customer’s trust account and recommended unsuitable options and non-traditional exchange-traded funds. Maughan was formerly registered with Financial West Group.

According to an order (No. 2017054755206) dated October 2019, Dan Maughan was associated with Financial West Group when, between October 2010 and January 2015, he churned and excessively traded a customer’s trust account, executing “approximately 1,648 trades, with a principal value of all purchases and sales in excess of $70 million.” The order goes on to state that this trading activity was “quantitatively unsuitable” and resulted in commissions and costs of about $841,000, while incurring realized and unrealized losses in the account of about $812,000. The order alleges as well that Maughan “recommended qualitatively unsuitable trades” in the account that included non-traditional exchange-traded funds and an exchange-traded note. According to FINRA, the account was formerly that of an elderly customer, inherited by two individuals, a couple, after that customer passed away. FINRA states that as of 2010, one of the account’s new owners worked for a plumbing company while the other worked part-time as a bookkeeper, and they “provided financial assistance to their two adult children.” The individual who worked for a plumbing company lost that job in 2012, according to FINRA, and stayed unemployed until at least the end of the relevant period. When they initially met with Maughan in 2010 to update the account’s paperwork, FINRA states, they directed him to keep its assets invested conservatively. As a result of his alleged excessive and unsuitable trading, Maughan was barred by FINRA from associating with any member firm in any capacity.

Daniel Maughan’s FINRA BrokerCheck report lists four customer complaints against him.

A 2015 complaint alleged that as a representative of Financial West Group, he breached his fiduciary duty, acted negligently, breached contract, and made misrepresentations of material facts. The complaint reached a settlement in 2017 of $550,000.

A 2009 complaint alleged that as a representative of Wedbush Morgan Securities, he breached his fiduciary duties, negligently misrepresented material facts, executed an unauthorized purchase, and gave unsuitable advice. The complaint reached a settlement of $10,000.

A 2002 complaint alleged that as a representative of Merrill Lynch, he churned investments, executed unauthorized trades, and made unsuitable investment recommendations. The complaint reached a settlement of $46,000.

A 2001 complaint alleged that as a representative of Merrill Lynch, he executed unauthorized purchases. The complaint reached a settlement of $51,321.

Dan Maughan is currently not registered with any FINRA member firm. His previous registrations include Financial West Group, Wedbush Securities, MetLife Securities, the Metropolitan Life Insurance Comapny, and Merrill Lynch. He has passed four securities industry qualification examinations and currently holds no state licenses. (Information current as of April 15, 2020.)