Former Financial West rep barred over alleged churning

Finra said Daniel Maughan generated commissions and costs of $840,000

Oct 16, 2019 @ 12:55 pm

By InvestmentNews

The Financial Industry Regulatory Authority Inc. has barred Daniel G. Maughan, a former broker with Financial West Group in Los Angeles, for having churned and excessively traded a customer's trust account.

[More:SEC bars broker for churning clients' accounts through firm]

From October 2010 through January 2015, Finra said that Mr. Maughan executed approximately 1,648 trades, with a principal value of all purchases and sales in excess of $70 million, in the customer's account.

"The annualized cost-to-equity ratio — the percentage the account had to appreciate to break even — was 21.06," Finra said in its disciplinary proceeding report. "Mr. 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."

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Finra said that Mr. Maughan also recommended qualitatively unsuitable trades in the account involving options, nontraditional exchange-traded funds and an exchange traded note.

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Mr. Maughan began his securities career in 1997 at Merrill Lynch, which discharged him in 2001. He then worked at three other firms before joining Financial West in 2010. He left the firm in 2017.

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