John Forster Allegedly Failed to Act in Clients’ Best Interests

John Forster (CRD #: 1303832), a broker registered with San Blas Securities, allegedly failed to act in his clients’ best interests, according to his BrokerCheck record, accessed on January 15, 2025. Keep reading if you have questions about his alleged conduct as a broker.
Investor Dispute
On December 27, 2024, an investor alleged that John Forster failed to act in their best interest. This dispute is currently pending.
In a pending dispute filed on December 5, 2024, an investor alleged that John Forster executed unauthorized trades from June 21, 2024 to the date of filing. The client seeks $700,000.
On June 12, 2023, an investor alleged that John Forster failed to act in her best interest and made an unsuitable recommendation with regard to a variable annuity. The client sought $272,000 in damages and received a settlement of $112,500.
A dispute filed on March 22, 2018, alleged that John Forster executed an unauthorized transfer of funds to process commodity trades from July 26, 2011, to May 1, 2012. This dispute was denied by the firm.
However, investors should be aware that firms can deny disputes without an external review. Investors can still seek out FINRA arbitration and potentially recoup their losses following a denial.
FINRA Rule 2111 and Regulation Best Interest
FINRA Rule 2111 requires that brokers tailor their investment recommendations to an investor’s profile, which describes their tax status, age, and other characteristics.
Regulation Best Interest (Reg-BI) is an SEC regulation that requires brokerage firms to put their clients’ best interests first. For example, firms must conduct reasonable due diligence when researching investments to ensure their recommendations are suitable for the investor.
FINRA Rule 3260
Unauthorized trading violates FINRA Rule 3260, which limits brokers to engaging in discretionary trading only in pre-authorized accounts. Both the firm and the client must approve an account before discretionary trading can occur.
FINRA Rule 2010
FINRA Rule 2010 holds brokers to high standards of commercial honor and just and equitable principles of trade.
Termination from Merrill Lynch, Pierce, Fenner & Smith
On November 6, 2024, John Forster was terminated from Merrill Lynch, Pierce, Fenner & Smith following allegations that he mismarked trades and entered orders in on-discretionary accounts without informing clients beforehand.
Background Information
John Forster has passed the following exams:
- Series 65 – Uniform Investment Adviser Law Examination
- Series 63 – Uniform Securities Agent State Law Examination
- SIE – Securities Industry Essentials Examination
- Series 7 – General Securities Representative Examination
- Series 3 – National Commodity Futures Examination
John Forster is a registered broker in 28 states and the District of Columbia.
He has also worked for the following firms:
- Merrill Lynch, Pierce, Fenner & Smith (CRD#:7691)
- Morgan Stanley (CRD#:149777)
- Citigroup Global Markets (CRD#:7059)
- Lehman Brothers (CRD#:7506)
- E. F. Hutton & Company (CRD#:235)
Kurta Law Can Help
If you worked with John Forster and you have concerns about your investments, please contact us today at 877-600-0098 or info@kurtalawfirm.com for a free consultation.
For over 20 years, Kurta Law has advocated on behalf of investors who want to recover their investment losses from brokers and brokerage firms. Kurta Law is a nationally recognized law firm and exclusively represents investors against brokers and brokerage firms on a contingency basis. This means that the firm only earns a fee if our securities attorneys recover money on your behalf.