FINRA suspended former Oppenheimer & Co. broker Zachary Ellis Taylor of Newport Beach, California for unsuitably recommending excessively risky products to senior investors, resulting in significant losses. The report states Zach Taylor recommended several retired senior customers liquidate their portfolios to invest in speculative options, which were tied to four technology companies with high price volatility.
Zachary Taylor (CRD #6074776), who also worked as a broker at Saxony Securities in Newport Beach, purportedly recommended senior clients liquidate diverse portfolios to invest in the risky options despite the customers' moderate risk tolerances and lack of experience in options trading, which FINRA said violated its Regulation Best Interest that generally requires brokers to have a reasonable basis to recommend products to customers.
Investigators said that Taylor recommended increasingly risky puts, which in turn exposed his investors to dangerous high risk situations. When the underlying tech stocks' prices fell below the strike price, customers were required to purchase securities at prices above market value, resulting in over-concentration in a single tech stock worth less than what the customers paid for it.
In other words, Taylor's risky trading strategy exposed the customer to the risk of losing money by overspending on risky securities, which came to fruition due to volatility (e.g., excessive risk) and resulting in losses. The report states that one 71-year-old customer of Taylor's incurred $130,000 in losses as a result of the ill-fated and unsuitable trading strategy.
Even worse, in terminating Taylor, Oppenheimer called into question his authority to trade in customer accounts: "Was unable to provide sufficient documentary evidence to support his contention that he had authority for all trades in a client's account."
Several settled customer complaints in Zach Taylor's BrokerCheck file alleged breach of contract, breach of fiduciary duty, fraud, negligence, misrepresentation, unjust enrichment, and unauthorized trading,
If you invested with former Oppenheimer & Co broker Zachary Taylor of Newport Beach, CA, or with any investment adviser or firm whose unsuitable recommendations to liquidate your portfolio or overconcentrate investments in risky and complex securities has resulted in losses or other damages, please call an experienced FINRA arbitration attorney at The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.