Let me get this straight. An investor, using a discount brokerage, based his decision on a buy recommendation from another broker and is now blaming them for his loss? What responsibility do they have to someone who isn't their client?
I don't mean to minimize the issue of the underwriters placing buy recommendations on a stock that everyone else knew had no future. That is a separate issue - and a very serious one. But their responsibility is largely with their own clients (i.e., the ones that PAID THEM) for selling them garbage. Another person who didn't pay those brokers was just plain stupid for "relying" on that information without any DD or any other information from that brokerage (although they had a "buy" recommendation, it certainly isn't an automatic buy. "Ken" as a retiree was probably not suitable to purchase those shares regardless, and if he was a client of the two brokerages that had the "buy" recommendation, it is likely they would have told him NOT to buy the shares).
If Ken had been a client of the brokerages that had the buy recommendation, that would be a completely different situation, especially considering he is a retiree. Then it would be a case of making an unsuitable recommendation. And perhaps there are a lot of those people out there, too, as someone had to be buying the massive amounts of new stock that those brokers were pumping out. But Ken wasn't their client. So perhaps "Ken", who I have a difficult time believing he did any DD, such as actually reading the SEC filings which would have told him the stock was garbage, on the stock before buying beyond the E-Trade screen. In this particular situation, I think it is much more Ken's fault for acting as his own investment advisor when he may not be capable of doing so.