FINRA Censures and Fines H. Beck Inc. for Supervisory Issues
According toThe Financial Industry Regulatory Authority, on September 27, 2017, H. Beck Inc. (CRD #1763, Bethesda, Maryland) was issued an AWC in which the firm was censured and fined $50,000.
Beck reportedly consented to the sanctions and to the entry of findings that through a registered representative, they made unsuitable recommendations of nontraditionalETFs and metals and mining stocks to a firm customer.
FINRA’s findings stated that the customer, a professional athlete with no investment experience, had a moderate risk tolerance and an investment objective of long-term growth. The customer lost a total of $1,115,793 on these investments.
According to FINRA, the firm allowed its registered representatives to recommend nontraditional ETFs to their customers without establishing and maintaining a supervisory system reasonably designed to ensure that these recommendations were suitable.
Beck reportedly failed to reasonably tailor its systems and procedures to address the unique risks involved with investing in nontraditional ETFs. It didn’t provide specific guidance to assist its brokers and supervisors in assessing the factors that would make a nontraditional ETF suitable or unsuitable for a particular investor.
Additionally, the firm allegedly did not provide any special training relating to the suitability of nontraditional ETFs and reviewed transactions involving nontraditional ETFs in the same manner it reviewed transactions involving standard ETFs and equities.
The firm reportedly paid the customer $1.5 million to settle his arbitration claims against the firm, which arose in part from the registered representative’s recommendations. As a result, the firm is not required to make restitution as part of this settlement.
For FINRA’s full findings see FINRA Case #2016048675901.
Investigating Potential Claims
The White Law Group is investigating the liability that H. Beck Inc. may have for losses sustained by their clients. Brokerage firms are required to adequately supervise their agents to ensure they are complying with FINRA rules. If it is determined that the broker dealer failed to supervise their agents, they can be held responsible for losses in a FINRA arbitration claim.
Are you concerned about your investments with H. Beck Inc.? The attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.
The foregoing information, which is all publicly available on FINRA’s website, is being provided by The White Law Group. The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Franklin, Tennessee.
For more information on The White Law Group, please visit www.whitesecuritieslaw.com