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Recent $190,000 Settlement Raises Concerns About Investment Practices
Joanna Ingberg Westcott (CRD# 1187278), currently registered with LPL Financial LLC in Tucson, Arizona, has been the subject of a recent customer complaint alleging unsuitable investment recommendations that resulted in a substantial $190,000 settlement. If you’ve invested with Ms. Westcott and experienced unexpected losses, especially in stocks or exchange-traded funds, our securities fraud attorneys are investigating and can help you explore your options for recovery.
Who is Joanna Ingberg Westcott?
Joanna Ingberg Westcott is a financial advisor with nearly two decades in the securities industry. According to her FINRA BrokerCheck report, she is currently employed by LPL Financial LLC, where she has been registered since March 2004.
She operates from the firm’s Tucson, Arizona office located at 2030 E. Speedway, #202, Tucson, AZ 85719. She’s registered as both a broker (since March 29, 2004) and an investment adviser representative (since April 5, 2004).
Westcott holds several professional qualifications, including:
- General Securities Representative Examination (Series 7)
- Securities Industry Essentials Examination (SIE)
- Uniform Combined State Law Examination (Series 66)
She is currently registered in 24 U.S. states and territories, with a particularly strong presence in the western United States.
Significant Customer Complaint and Settlement
What stands out in Westcott’s regulatory history is a recent customer complaint that resulted in a substantial monetary settlement:
$190,000 Settlement for Unsuitable Investment Recommendations
According to FINRA records, in November 2023, a customer filed a complaint alleging that from September 2019 to February 2023, Westcott made unsuitable investment recommendations involving:
- Equity securities (common and preferred stocks)
- Exchange-traded funds (ETFs)
This complaint was settled on May 15, 2024, for $190,000. While Westcott was not personally named as a respondent and did not make a monetary contribution to the settlement (as noted in her broker statement), the significant settlement amount raises concerns about the investment advice provided to clients during this period.
Understanding Unsuitable Investment Allegations
The concept of investment suitability is fundamental to securities regulations. Financial advisors have a duty to recommend only investments that are appropriate for their clients based on factors such as:
1. Risk Tolerance
Every investor has a different comfort level with market volatility and potential losses. Conservative investors should generally receive recommendations for lower-risk investments, while aggressive investors might appropriately be recommended higher-risk securities.
2. Investment Objectives
Recommendations should align with the client’s stated goals, whether those include capital preservation, income generation, moderate growth, or aggressive growth.
3. Financial Situation
An advisor should consider a client’s overall financial picture, including income, net worth, tax situation, and liquidity needs when making investment recommendations.
4. Investment Timeline
A client’s time horizon for needing access to their funds is critical in determining suitable investments. Short-term money requires different treatment than long-term investments.
5. Investment Experience and Knowledge
More complex investment products may be unsuitable for investors with limited financial sophistication or investment experience.
Potential Issues with Stocks and ETFs
While stocks and exchange-traded funds are common investment vehicles, they can pose significant risks if improperly recommended or if they don’t match an investor’s profile:
Equity Securities (Stocks)
Common concerns with stock recommendations include:
- Concentration risk: Overloading a portfolio with stocks from a single company, sector, or industry
- Volatility exposure: Recommending high-volatility stocks to conservative investors
- Dividend risk: Relying on dividend-paying stocks for income without disclosing sustainability risks
- Growth vs. value misalignment: Recommending growth stocks to income-focused investors or vice versa
- Market capitalization mismatch: Recommending small-cap or micro-cap stocks (which tend to be more volatile) to risk-averse investors
Exchange-Traded Funds (ETFs)
ETFs can present their own suitability concerns:
- Leveraged and inverse ETFs: These complex products are designed for short-term trading, not long-term holding, and can perform unexpectedly over extended periods
- Specialty or sector ETFs: These can introduce high concentration risk if overused
- Commodity ETFs: These may involve complex structures and tax implications that are not fully explained to investors
- Illiquid ETFs: Some niche ETFs have limited trading volume, potentially creating liquidity issues
- High-expense ratio ETFs: Some ETFs carry costs that erode returns without providing offsetting benefits
Red Flags for Investors
If you’ve worked with Joanna Westcott or any financial advisor, be alert to these potential warning signs of unsuitable investments:
1. Unexpected Volatility
If your portfolio experiences dramatic swings in value that seem inconsistent with your understanding of your investments, this could indicate your investments don’t match your risk profile.
2. Concentration in Similar Investments
A properly diversified portfolio shouldn’t be heavily concentrated in a single stock, sector, or investment type. Excessive concentration increases risk and may signal unsuitable recommendations.
3. Complex Investments You Don’t Understand
If your advisor has recommended investments that you struggle to understand after they’ve been explained, this could be a red flag for unsuitability.
4. Frequent Trading or Account Turnover
Excessive trading that doesn’t seem necessary or aligned with your investment strategy could indicate your account is being managed in a way that generates commissions rather than follows your best interests.
5. Performance Significantly Different from Benchmarks
While short-term deviations are normal, consistent significant underperformance compared to relevant benchmarks might indicate unsuitable investment selections.
Employment History and Business Activities
In addition to her role with LPL Financial, Joanna Westcott has disclosed several other business activities:
- Bill Westcott, Inc. – A DBA entity for LPL business established in 2007
- Event Driven Media Partners – A media and public relations LLC where she spends approximately 2% of her time
- Senior Healthcare Partnerships, Inc. – A non-variable insurance business where she serves as an agent (established September 2024)
Prior to joining LPL Financial, Westcott was briefly registered with Legend Equities Corporation from July 2003 to March 2004.
Legal Options for Investors Who Have Suffered Losses
If you’ve invested with Joanna Ingberg Westcott and experienced unexpected losses, particularly in stocks or ETFs, you may have several options for recovery:
1. FINRA Arbitration
The Financial Industry Regulatory Authority (FINRA) provides an arbitration forum for resolving disputes between investors and brokers. Benefits of this approach include:
- Efficiency: Generally faster than court litigation
- Expertise: Arbitrators often have industry knowledge
- Binding decisions: Final resolution without lengthy appeals
- Limited discovery: Streamlined evidence gathering process
- Privacy: More confidential than public court proceedings
Most investor claims must be filed within six years of the events giving rise to the dispute, so timely action is essential.
2. Securities Litigation
In some cases, particularly those involving multiple investors with similar claims, securities litigation might be appropriate. This could involve:
- Class action lawsuits
- Individual litigation in state or federal court
- Derivative shareholder actions
3. Regulatory Complaints
While not directly resulting in monetary recovery, filing complaints with securities regulators can create an official record of potential misconduct and sometimes lead to regulatory actions that may include restitution:
- FINRA Office of the Whistleblower
- SEC Office of Investor Education and Advocacy
- Arizona Corporation Commission Securities Division
- State securities regulators where you reside
Potential Claims in Investment Loss Cases
Our securities attorneys evaluate several potential legal claims when assessing cases involving financial advisors like Joanna Westcott:
Unsuitability
We analyze whether the recommended investments matched your:
- Risk tolerance
- Investment objectives
- Financial situation
- Age and investment timeline
- Overall investment portfolio
Breach of Fiduciary Duty
Investment advisors typically owe clients fiduciary duties that include:
- Placing client interests first
- Avoiding conflicts of interest
- Providing full disclosure of material facts
- Acting with loyalty and good faith
Negligence
Financial advisors must exercise reasonable care when providing investment advice, including:
- Conducting adequate due diligence on recommended investments
- Understanding product features and risks
- Following industry standards and regulatory requirements
- Monitoring investments appropriately
Misrepresentation and Omission
Advisors may be liable for making false statements or failing to disclose material facts about investments, such as:
- Understating investment risks
- Exaggerating potential returns
- Failing to disclose conflicts of interest
- Mischaracterizing product features
The $190,000 Settlement: What It May Indicate
The recent $190,000 settlement of the client complaint against LPL Financial regarding Westcott’s investment recommendations merits particular attention. While Westcott herself notes she was not named as a respondent and made no monetary contribution to the settlement, the substantial amount suggests the firm saw significant risk in contesting the allegations.
A settlement of this size typically indicates:
- Potential merit to the claims: Firms generally don’t settle meritless claims for substantial amounts
- Recognizable damages: The client likely demonstrated quantifiable losses
- Possible supervision issues: The settlement may reflect concerns about the firm’s oversight duties
- Risk mitigation: LPL may have settled to limit potential further exposure or negative publicity
It’s worth noting that the settlement covered approximately 3.5 years of investment recommendations (September 2019 to February 2023), suggesting a pattern of potentially problematic advice rather than a single isolated incident.
How Our Investment Fraud Attorneys Can Help
Our experienced securities attorneys have recovered millions for investors who have suffered losses due to broker misconduct. When you work with us:
We Provide a Free Case Evaluation
- Comprehensive review of your investment situation
- Analysis of potential legal claims
- Clear explanation of recovery options
- Transparent assessment of case strengths and challenges
We Handle All Aspects of Your Claim
- Detailed investigation of your investment history
- Expert analysis of account statements and transaction records
- Management of all procedural requirements
- Strategic negotiation with opposing counsel
- Presentation of your case in arbitration if necessary
We Work on a Contingency Fee Basis
- No recovery, no fee structure
- Alignment of our interests with maximizing your recovery
- No upfront costs or hourly billing
- Clear fee agreement established at the outset of representation
Time Limitations for Investment Loss Claims
If you believe you’ve been harmed by unsuitable investment recommendations, it’s important to act promptly. Legal claims are subject to strict time limitations:
- FINRA arbitration claims must generally be filed within six years of the event giving rise to the dispute
- State securities law claims often have 2-5 year statutes of limitations
- Common law claims may have different limitation periods based on state law
Delaying action could permanently forfeit your right to recovery.
Take Action to Protect Your Financial Future
If you invested with Joanna Ingberg Westcott and experienced unexpected losses, particularly in stocks or exchange-traded funds between 2019 and 2023, you may have legal options for recovery. The recent $190,000 settlement suggests potential issues with investment recommendations that may have affected other clients as well.
Our law firm specializes in representing investors who have suffered losses due to unsuitable investment recommendations, and we have the experience and resources to thoroughly investigate your case and pursue all available avenues for recovery.
Call 800-950-6553 or complete our online form to schedule your no-obligation case evaluation.
Disclaimer: This article is for informational purposes only and does not constitute legal advice. The information about Joanna Ingberg Westcott is based on publicly available FINRA BrokerCheck records. The settlement mentioned does not necessarily indicate wrongdoing by Ms. Westcott personally, as settlements are often reached to avoid the cost and uncertainty of litigation without admission of fault. Each investor’s situation is unique, and past results do not guarantee future outcomes.
