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SEC Names Patrick Egan in Civil Suit

Aug 10, 2022 Regulation Best Interest

Patrick Egan (CRD #: 2973478), a broker registered with Western International Securities, is the subject of an SEC lawsuit, according to his BrokerCheck record, accessed on July 23, 2022. If you want to know more about his conduct as a broker, read on.

SEC Lawsuit

On June 15, 2022, the Securities and Exchange Commission filed a civil lawsuit against Western International Securities and five of its registered representatives, including Patrick Egan, in connection with their collective recommendations to retail customers to purchase an unrated debt security.

According to the SEC, GWG Holdings, Inc. allegedly offered corporate bonds known as L Bonds, which were allegedly high risk, illiquid, and only suitable for investors with “substantial financial resources.” The L Bonds relevant to this suit allegedly paid fixed interest rates between 5.50-8.50%, depending on their maturity period, which could be two, three, five, or seven years.

From July 2020 to April 2021, Patrick Egan and the other representatives allegedly recommended and sold approximately $13.3 million in L Bonds to clients. The SEC alleges that the defendants failed to exercise reasonable diligence to understand the risks, costs, and rewards associated with L Bonds prior to recommending them.

The SEC further alleges that Patrick Egan and others recommended L Bonds to at least seven clients without a reasonable basis to believe these bonds were in their clients’ best interests. These clients allegedly had limited investment experience, limited net worth, moderate or moderate-conservative risk tolerances, investment objectives that did not include speculation, and/or they were retired.

Additionally, the SEC alleges that Western International Securities’ written policies and procedures failed to provide specific guidance to registered representatives on applying Regulation Best Interest, specifically concerning the enforcement of the Care Obligation.

The SEC alleges that Patrick Egan violated Rule 15l-1(a)(1) of the Securities Exchange Act of 1934. This civil action is currently pending.

Regulation Best Interest

Regulation Best Interest (Reg-BI), codified as Rule 15l-1, requires brokers to consider investors’ best interests when recommending securities or investment strategies.

The Care Obligation requires firms and brokers to put in a reasonable level of effort to understand an investment’s risks, costs, and potential returns, and to provide recommendations with a reasonable basis to believe that it is in the investor’s best interest.

Background Information

Patrick Egan 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 4 – Registered Options Principal Examination
  • Series 24 – General Securities Principal Examination

Patrick Egan is a registered broker in California and Texas and a registered investment adviser in 12 states.

He has also worked with Coordinated Wealth Management (CRD#:171643).

Kurta Law Can Help

If you worked with Patrick Egan 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.