Donald J. Everhart's Unsuitable Recommendations

Donald J. Everhart allegedly recommended an unsuitable investment to a retail customer, in violation of Regulation Best Interest (Reg BI) under the Securities Exchange Act of 1934 and FINRA Rule 2010. FINRA stated that Everhart advised a client to invest a substantial portion of her assets in speculative, unrated GWG L Bonds, resulting in a highly concentrated and risky investment position that did not align with her stated investment objectives or risk tolerance.

Everhart entered the securities industry in 1991 and worked with multiple FINRA member firms over his career. In 2010, he registered with Whitehall-Parker Securities, Inc., serving in various capacities including General Securities Representative, Principal, and Municipal Securities Principal. He later associated with another member firm in January 2023 before voluntarily terminating his registration in August 2024. Everhart is currently not registered with any FINRA member firm but remains under FINRA’s jurisdiction.

Reg BI requires brokers to act in the best interest of retail customers when making investment recommendations, placing the customer’s interest ahead of their own. The Care Obligation under Reg BI mandates that brokers exercise reasonable diligence, care, and skill to ensure a recommendation fits a client’s investment profile—factors including risk tolerance, income, net worth, and investment objectives. For example, a broker should not advise a risk-averse retiree with limited assets to invest heavily in volatile start-up stocks, nor should they recommend that a client in need of liquidity purchase an illiquid long-term bond.

FINRA found that Everhart recommended the customer invest $200,000—over 40% of her net worth—in GWG L Bonds despite her conservative risk profile, modest income, and objective of capital preservation. The bonds were speculative, illiquid, and high-risk, making the recommendation inconsistent with her financial needs. Everhart earned $7,500 in commissions from the sale, and the customer later suffered losses when GWG defaulted on its obligations and subsequently filed for bankruptcy.

Lufrano Law, LLC is a national investment litigation firm and has experience representing investors who have investment disputes with brokers and broker-dealers. Please contact us at (800) 627-2179 for more information if you have been the victim of investment negligence or fraud.

The content on this site reflects personal opinions and does not constitute statements of fact. No findings have been made against the firms or individuals mentioned. This blog is intended solely for educational purposes, drawing on publicly available information to provide general insights and a basic understanding of the law. It is not a substitute for legal advice.