Luke Johnson: Ex-Coastal Advisor Named in FINRA Complaint

Former Scottsdale financial advisor Luke Johnson (CRD# 3257008) allegedly recommended unsuitable investments in GPB Capital and other products while falsifying his customers’ account information, according to an enforcement action filed this month by the Financial Industry Regulatory Authority. FINRA records show that the former Coastal Equities representative is not currently registered with any broker-dealer firm.

FINRA filed an enforcement action against Mr. Johnson on July 12, 2023. As a report by Wealth Management explains, the complaint alleges that he induced a total of nine customers to purchase illiquid investments “while falsifying information about their risk tolerance and even whether they were accredited investors.” FINRA alleges further that he received commissions totaling $132,000 in connection with these unsuitable recommendations. Some of the investments were in GPB Holdings, an alleged Ponzi-like scheme.

Mr. Johnson “dramatically inflated his customers’ net worth and liquid net worth and dramatically understated the percentage of his customers’ assets invested in alternative investments in order to circumvent Coastal [Equities’] concentration policy and Coastal’s supervisory oversight,” according to FINRA’s complaint. His alleged victims included retired senior citizens. One customer was 80 years old, per FINRA. Others were 69, 57, 72, and 87.

The 87-year-old customer is described in the complaint as a widow living on her late husband’s government pension. Mr. Johnson allegedly recommended that she invest a total of $314,400 in six alternative investments, including GPB investments, and either himself or through his assistants falsified his member firm’s disclosure forms for the customer in order to “to state falsely and inaccurately that her annual income was $58,000, her liquid net worth was $1 million, and her net worth was $1.5 million.” In fact, her “liquid net worth consistently remained at approximately $700,000 and her net worth remained at approximately $1,000,000,” while her annual income was $27,000, according to FINRA. She represents just one of the customers whom he allegedly recommended unsuitable investments while falsifying their account information. .

In connection with this action, FINRA is requesting sanctions including the disgorgement of ill-gotten gains.

Mr. Johnson’s BrokerCheck report discloses more than two dozen investor complaints, 20 of which have reached settlements, some for six figures. More information about these complaints is available here. (Information current as of July 17, 2023.)

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