Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Mary Beslagic (Beslagic), previously associated with Edward Jones, has at least 2 disclosable events. These events include one customer complaint, one tax lien, alleging that Beslagic recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on December 12, 2024.
Without admitting or denying the findings, Beslagic consented to the sanctions and to the entry of findings that she willfully violated Rule 15l-1(a)(1) under the Exchange Act (Reg BI) by recommending that customers of her member firm invest proceeds of their home equity loan in mutual funds, which was not in the customers’ best interest. The findings stated that Beslagic was aware of the customers’ intended use of their liquified home equity proceeds and that the customer had several near-term liquidity needs. The mutual funds began declining in value shortly after the customers purchased them, resulting in the customers selling a portion of their investments at a loss and taking out margin loans totally approximately $25,000 to meet their near-term liquidity needs. Beslagic’s firm provided compensation to the customer for their losses.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $127,000.00 on July 11, 2023.
Clients allege from approximately March 2022-March 2023 the registered representative’s recommendation to invest home equity line of credit proceeds in mutual funds was inappropriate resulting or contributing to account losses, the decision to surrender a long term care policy, and use of margin.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Material information always includes information concerning the investor as well as the cost of the recommendation. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. So, a brokerage firm should not depend solely on information from the issuer regarding a company, but must perform its own thorough investigation.
Another protective measure for investors is the requirement for brokers to disclose. Brokers are required to report events to FINRA, such as customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters, as shown on their BrokerCheck reports. FINRA has recognized that recent research shows past regulatory and customer complaint issues can indicate future problems for brokers. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Beslagic has been in the securities industry for more than 11 years. Beslagic has been registered as a Broker with Edward Jones since 2011.
Investors who have suffered losses are encouraged to contact us at (800) 810-4262 for consultation. At Gana Weinstein LLP, our attorneys are experienced representing investors who have suffered securities losses due to the mishandling of their accounts. Claims may be brought in securities arbitration before FINRA. Our consultations are free of charge and the firm is only compensated if you recover.
