Stockbroker John Carolyn (CRD# 4485799) is currently registered with UBS Financial Services, Inc. and has been affiliated with the firm in Houston, Texas since February 2002. He was not previously registered with any other firm.
During his association with UBS, John Carolyn has had a total of five disputes filed against him, according to his public FINRA BrokerCheck report. Five complaints are currently pending, while one has been finalized. All of the pending complaints are from recent disputes filed in 2016 and 2017.
Each of the five disputes indicates that Carolyn recommended overconcentration in energy securities for oil and gas. The complaints alleged varying damages, including: $70,000, $85,000, $100,000, $450,000 and $750,000—for a total of $1,455,000 in damages.
The closed complaint indicates that the client alleged that John Carolyn represented his managed accounts as capital preservation. The client alleged $59,000 in damages. John Carolyn denied the allegations.
What is Overconcentration?
Put simply, overconcentration is the opposite of diversification. An investment portfolio should be balanced and diversified among industry sectors, securities, and asset classes. Furthermore, these diversified investments should accurately reflect an investor’s individual financial goals and personal circumstances.
Overconcentration occurs when there are assets in investments that are too similar to one another. If a stockbroker is found to have placed a large portion of investor funds in a particular type of security or investment, and a large loss ensues, the broker can be held liable for stockbroker misconduct due to overconcentration.
In John Carolyn’s case, his clients alleged that he had engaged in overconcentration by placing and improperly allocating a significant amount of investment funds in energy (oil and gas) securities. As a result, these clients alleged they lost a significant amount of money.
It is imperative that stockbrokers uphold their duty to their clients by avoiding the unnecessary risks that are associated with overconcentration. Brokers should focus on maintaining adequate diversification for investor portfolios and should consider an individual’s risk tolerance, needs and financial goals in order to best serve their clients.
If you have lost a significant amount of money as a result of possible investment misconduct, including overconcentration, during your relationship with broker John Carolyn, you may be entitled to seek legal compensation. Stockbroker misconduct attorneys at Meyer Wilson are committed to holding stockbrokers accountable for their actions and to ensure that investors are properly protected in their financial dealings. Attorneys are available to provide you with a free case review and can inform you of the legal options that are available to you as you consider taking further action.