As of January 30, 2019, after almost 50 years in the investment industry, Michael Cowan ( CRD# 55587) is no longer registered as a broker. This comes after a customer complaint alleging $8 million in investment losses. This is the fourth customer complaint regarding Cowan’s activities between 2000 and 2018.
The current $8 million dollar claim and a 2006 settled dispute, both came from trust beneficiaries, who were customers of Cowan. They claim the broker mismanaged their trust assets when he failed to diversify their accounts and made unsuitable recommendations. The current claim is pending, but the 2006 settlement awarded the customer $25,000.
Unauthorized trading and unsuitable recommendations gave rise to the 3rd complaint on Cowan’s record. His customer claimed the broker mismanaged an account by suggesting aggressive growth funds, technology stocks, and variable annuities. This complaint settled in 2004 for $450,000.
Finally, the 4th complaint alleged a practice commonly known as churning. Cowan made an inappropriate number of trades and took commissions for speculative investing and margin. This practice generates more commissions for brokers, but little or no income benefit for the customer. This case settled for $30,000.
Under FINRA rules, member firms are responsible to supervise all broker activity to safeguard against problems. So, FINRA may investigate the actions of Cowan as well as his member firm Ameriprise Financial Service, Inc. It is possible the broker and the firm are both liable.
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