March, 2025 | Based in Highlands Ranch, CO
Considering potential financial losses from broker misconduct? Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation. Our securities fraud attorneys can help you understand your options for recovery.
Critical Information About J Craig McILROY
- Full Name: J Craig McILROY
- CRD Number: 1422508
- Current Location: Highlands Ranch, CO
- Current Employer: LPL Financial LLC
- Office Address: 1745 Shea Center Dr. Suite 400, Highlands Ranch, CO 80129
- Registration Status: Currently registered with 1 Self-Regulatory Organization and 22 U.S. states/territories
- State Licenses: Holds licenses in Arizona, Arkansas, California, Colorado, Florida, Georgia, Idaho, Indiana, Kansas, Maryland, Michigan, Minnesota, Nevada, New Mexico, New York, North Carolina, Ohio, Pennsylvania, Texas, Utah, Washington, and Wyoming
- Experience: In the securities industry since 1985
- FINRA BrokerCheck: 5 customer disputes (3 settled, 2 pending)
- Previous Employers: OSAIC FA, Inc. (formerly Lincoln Financial Advisors Corporation) (1998-2024), The Lincoln National Life Insurance Company (2002-2006)
- Ability to Recover Losses: Within FINRA’s 6-year eligibility period for arbitration claims
A Pattern of Unsuitable Oil & Gas Investment Recommendations
J Craig McILROY, a financial advisor currently with LPL Financial LLC, is facing serious allegations regarding unsuitable investment recommendations. Multiple clients have filed complaints alleging that McILROY recommended high-risk oil and gas investments that were inconsistent with their risk tolerance and investment objectives.
The FINRA BrokerCheck report reveals a troubling pattern – multiple customer complaints with strikingly similar allegations spanning over a decade. These complaints focus on oil and gas investments and private placement annuities that clients claim were misrepresented as suitable for conservative investors.
Recent Allegations Continue Historical Pattern
In December 2024, two clients filed FINRA arbitration claims (cases 24-02312 and 24-02317) alleging that McILROY recommended unsuitable oil and gas investments. These recent claims follow a December 2022 complaint with identical allegations that resulted in a $133,500 settlement in August 2023.
The pattern appears to stretch back to at least 2011, when multiple clients alleged that investments purchased between 2008-2010 were misrepresented as “safe and consistent with low-risk tolerance” when their “true nature and risks were not disclosed.” Those claims resulted in substantial settlements: $228,786 in one case and an extraordinary $1,179,426 in another case.
McILROY’s Background and Career Timeline
J Craig McILROY has been in the securities industry since 1985, beginning his career with MONY Securities Corp. His registration history reveals a series of positions with various firms:
- MONY Securities Corp. (1985-1998)
- CIGNA Financial Advisors (April 1998-June 1998)
- Lincoln Financial Advisors/OSAIC FA, Inc. (1998-August 2024)
- LPL Financial LLC (August 2024-Present)
McILROY holds the Certified Financial Planner designation and has passed the Securities Industry Essentials Examination, the General Securities Representative Examination (Series 7), and the Uniform Securities Agent State Law Examination (Series 63).
His recent move to LPL Financial in August 2024 coincides with the timing of customer complaints, raising questions about whether the regulatory issues may have influenced his change of firms.
Red Flags: What Investors Should Know
The FINRA BrokerCheck report for J Craig McILROY reveals several concerning patterns that serve as red flags for investors:
1. Repeated Allegations of Unsuitable Investments
Multiple clients have alleged that McILROY recommended inappropriate investments. In particular, oil and gas investments appear to be a recurring theme in customer complaints. Oil and gas investments typically carry substantial risks including:
- High volatility due to fluctuating energy prices
- Illiquidity (difficulty selling the investment)
- Complex tax implications
- Substantial risk of principal loss
- Potential for complete investment failure
2. Misrepresentation Claims
Several clients claimed that McILROY misrepresented high-risk investments as “safe” and “consistent with low-risk tolerance.” This type of misrepresentation, if proven, would constitute a serious violation of FINRA Rule 2020, which prohibits manipulative and deceptive practices.
3. Substantial Settlements
The size of the settlements in McILROY’s previous cases is significant. One case settled for over $1.1 million, suggesting potentially serious misconduct. While settlements do not constitute admissions of wrongdoing, the pattern and amounts are noteworthy.
4. Recent Firm Change
McILROY’s move to LPL Financial in August 2024 after 26 years with Lincoln Financial Advisors/OSAIC FA raises questions, particularly given the timing relative to the customer complaints.
Legal and Regulatory Framework
FINRA rules establish clear obligations for financial advisors that appear relevant to the allegations against McILROY:
FINRA Rule 2111 (Suitability)
This rule requires that financial advisors have a reasonable basis to believe that a recommended investment strategy or transaction is suitable for the customer based on the customer’s investment profile. The investment profile includes factors like:
- Age
- Financial situation
- Tax status
- Investment objectives
- Investment experience
- Risk tolerance
- Time horizon
- Liquidity needs
The multiple claims alleging unsuitable oil and gas investments suggest potential violations of this fundamental rule.
FINRA Rule 2010 (Standards of Commercial Honor)
This rule requires brokers to observe high standards of commercial honor and just and equitable principles of trade. Misrepresenting investments or failing to disclose material risks would violate this standard.
FINRA Rule 2020 (Manipulative and Deceptive Practices)
This rule prohibits the use of manipulative, deceptive, or other fraudulent devices to effect securities transactions. Allegations that investments were misrepresented as “safe” when they carried significant risks would implicate this rule.
Guidance for Affected Investors
If you’ve worked with J Craig McILROY and have concerns about your investments, particularly oil and gas investments or private placement annuities, consider taking these steps:
1. Review Your Account Statements and Investment Documents
Gather all documentation related to your investments, including:
- Account statements
- Investment prospectuses
- Marketing materials
- Email communications
- Notes from meetings
- Account opening documents that show your risk tolerance and investment objectives
2. Assess Performance Against Representations
Compare how your investments have performed relative to what was represented to you. Were the risks adequately disclosed? Were the investments suitable for your stated objectives and risk tolerance?
3. Consider the Statute of Limitations
FINRA arbitration claims generally must be filed within six years of the event giving rise to the claim. Don’t delay in seeking legal advice if you believe you were sold unsuitable investments.
4. Consult with a Securities Attorney
An experienced securities fraud attorney can:
- Evaluate your potential case
- Explain your options for recovery
- Help determine if you have grounds for a FINRA arbitration claim
- Guide you through the recovery process
5. File a FINRA Arbitration Claim if Appropriate
If you have suffered losses due to potentially unsuitable investment recommendations, FINRA arbitration provides a forum for seeking recovery. The process typically involves:
- Filing a statement of claim
- Arbitrator selection
- Discovery of evidence
- A hearing before the arbitration panel
- An award decision that is binding on the parties
The Role of Forensic Analysis in Investment Fraud Cases
When evaluating potential broker misconduct, securities attorneys often employ forensic analysis to identify patterns that may indicate improper behavior:
Trading Pattern Analysis
Excessive trading (churning), concentration in high-risk securities, or unsuitable asset allocation can be identified through detailed analysis of trading patterns.
Risk Profiling Comparison
Comparing the client’s documented risk tolerance with the actual risk level of recommended investments can reveal mismatches that support claims of unsuitability.
Disclosure Review
Careful examination of disclosure documents can reveal whether the broker adequately communicated the true risks of investments to clients.
Legal Remedies for Investors
Investors who have suffered losses due to financial advisor misconduct have several potential avenues for recovery:
FINRA Arbitration
Most investment disputes are resolved through FINRA arbitration, which provides a more streamlined and specialized forum than traditional court litigation.
Potential Recovery
Successful claims may result in:
- Return of principal investment
- Market-adjusted damages (what the portfolio would have earned in suitable investments)
- Interest
- In egregious cases, potential punitive damages
- Attorney’s fees (in some circumstances)
Contingency Fee Representation
Many securities fraud attorneys work on a contingency fee basis, meaning they only get paid if they recover money for you. This arrangement allows investors to pursue claims without paying upfront legal fees.
The Importance of Due Diligence
The allegations against J Craig McILROY highlight the critical importance of conducting due diligence before working with a financial advisor:
- Check FINRA BrokerCheck: Always review a broker’s history through FINRA’s BrokerCheck service before establishing a relationship.
- Verify Risk Disclosures: Ensure that all investment risks are clearly explained and documented.
- Get Investment Recommendations in Writing: Documentation of recommendations provides important evidence if disputes arise later.
- Question Oil & Gas Investments: Be particularly cautious about oil and gas investments, which are often high-risk and complex.
- Ensure Alignment with Risk Tolerance: Confirm that recommended investments align with your documented risk profile.
Ready to discuss your potential case with an experienced securities fraud attorney? Your financial recovery may depend on taking prompt action. Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation. Our team will help you understand your options and the potential for recovering your investment losses.
