(888) 637-5510

Written by 2:48 am Blog, Broker Investigations, FINRA SEC Sanctions

Luke Michael Johnson Suspended by FINRA

Luke M. Johnson Broker Investigation, featured by Top Securities Fraud Attorneys, The White Law Group

Broker Luke Michael Johnson of Coastal Equities (now known as Realta Equities) Sanctioned for Unsuitable Investments

The White Law Group continues to investigate potential securities claims involving Luke Michael Johnson and the liability his employers may have for failure to supervise him.

According to an Order Accepting Offer of Settlement on February 1, 2024, FINRA has reportedly sanctioned Luke Michael Johnson with 18 months suspension, A fine of $15,000; and  restitution in the amount of $21,797.30. Johnson was reportedly affiliated with Coastal Equities (now known as Realta Equities) at the time.

The Financial Industry Regulatory Authority (FINRA) reportedly filed disciplinary charges against Luke Johnson on July 12, 2023, after the broker allegedly unsuitably invested nine clients in high-risk investments, including GPB Holdings private placements. FINRA is the regulator who oversees brokers and brokerage firms.

FINRA alleged that the millions in investments were made without knowledge of the clients’ risk tolerance and even whether they were accredited investors. These recommendations included at least $1.05 million in investments in GPB Capital’s private placement offerings. GPB Capital has reportedly been under investigation for the last few years and the subject of many lawsuits involving alleged material misstatements and omissions. 

According to FINRA, while Johnson was working for Coastal Equities, Johnson allegedly inflated his customers’ net worth and liquid net worth while dramatically understating the percentage of his customers’ assets invested in alternative investments in order to purportedly circumvent Coastal’s concentration policy and Coastal’s supervisory oversight. The firm reportedly had a policy that limited its customers from investing more than 35% of their liquid net worth in alternative investments, such as private placements. 

In 2020, we reported about Johnson’s unusually high number of customer complaints. That number has increased since then. Luke Michael Johnson, Coast Equities Reportedly has 17 Customer Complaints 

In December 2023, Coastal Equities (now known as Realta Equities Inc.) reportedly settled charges with FINRA after the company allegedly failed to properly supervise a registered representative who engaged in “excessive and unsuitable trading” in four customer’s accounts related to investments in offerings issued by GPB Capital Holdings without notifying them that the issuer had failed to make timely required filings with the Securities and Exchange Commission, including filing audited financial statements. 

GPB Capital – Private Placements 

 In February 2021, the CEO of GPB Capital Holdings and two others were arrested, and GPB Capital was charged with engaging in a large-scale fraudulent scheme, described as being similar to a Ponzi scheme. The alleged scheme is said to have defrauded approximately 17,000 investors across the United States of more than $1.7 billion. The charges include fraud, wire fraud, and conspiracy. 

The U.S. Attorney’s Office for the Eastern District of New York, along with the Securities and Exchange Commission (SEC) and seven state regulators, filed charges against GPB Capital and its executives on February 4, 2021. The SEC additionally accused GPB Capital of violating whistleblower protection laws. 

According to the complaint, GPB executives allegedly misled investors regarding the source of funds used to pay an 8% annualized distribution to investors. They allegedly falsified financial statements to artificially inflate the income of limited partnership funds, giving the impression that the funds were generating enough income to cover the distribution payments. The executives reportedly assured investors that the monthly distributions would be fully covered by profits from the portfolio’s companies. However, it is alleged that at least some of the distribution payments were made using funds from new investors, indicating a Ponzi-like structure. 

The SEC claims that GPB Capital was able to sustain this scheme for over four years by concealing the true financial condition of the funds from investors. They neglected to provide audited financial statements and failed to register two of their funds with the SEC. 

These allegations indicate a fraudulent scheme involving misrepresentation, falsification of financial information, and the use of new investors’ funds to pay existing investors, all contributing to significant financial losses for thousands of investors. 

FINRA BrokerCheck – Luke Johnson   

The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.     

BrokerCheck provides investors with detailed information about the professional history, qualifications, and regulatory actions of brokers and brokerage firms. Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.     

According to his FINRA broker report, Luke Michael Johnson (CRD # 3257008) has 26 customer complaints on his record. He also has three employment separations. He was reportedly affiliated with the following firms during his career, among others:    

04/03/2012 – 12/13/2019, COASTAL EQUITIES, INC. (CRD#:23769), SCOTTSDALE, AZ,
B, 09/01/2006 – 03/23/2009, SUMMIT BROKERAGE SERVICES, INC. (CRD#:34643), SCOTTSDALE, AZ

According to its FINRA BrokerCheck report, Coastal Equities is now operating under the name Realta Equities, Inc. (CRD#23769)

Recovery of Investment Losses    

The White Law Group is investigating potential securities claims involving Luke Johnson and the liability his employers may have for failure to supervise him. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.               

The White Law Group is a national securities fraud, securities arbitration, and investor protection law firm with offices in Chicago, Illinois and Seattle, Washington.  We represent investors in all 50 states including Arizona. Our attorneys have recovered millions of dollars from many brokerage firms in the past.                      

If you are concerned about your investments with Luke Johnson, please call the securities fraud attorneys at The White Law Group at 888-637-5510 for a free consultation.                       

For more information on The White Law Group, and its representation of investors, please visit WhiteSecuritiesLaw.com.          



Tags: , , , , Last modified: February 29, 2024