Publicly available records published by the Financial Industry Regulatory Authority (FINRA) and accessed on October 9, 2017 indicate that Maryland-based brokerage and advisory firm H. Beck (CRD# 1763) was recently sanctioned by FINRA in connection to alleged rule violations stemming from the recommendation and sale of non-traditional exchange-traded funds
Established in Maryland in 1984, H. Beck is headquartered in Bethesda, Maryland and registered in 52 US states and territories. James Dresselaers is President; Scott Thorson is Executive Vice President and Chief Operating Officer; Benjamin Cooper is Senior Vice President and Chief Legal Officer; Raymond Hessling is Chief Compliance Officer. George Connolly is Chairman and Chief Executive Officer; Benjamin Cooper is Senior Vice President and Chief Legal Officer; Rayond Hessling is Senior Vice President and Chief Compliance Officer; Sarah Sanfilippo is Interim Investment Adviser Chief Compliance Officer; and Scott Thorson is Interim President, Financial and Operations Principal, Executive Vice President and Chief Operating Officer. The firm is a wholly owned subsidiary of Securian Financial Group.
According to the firm’s BrokerCheck report, the firm was sanctioned by FINRA last month following allegations that through a registered representative it “made unsuitable recommendation’s to the firm’s customer” for “investments of more than $2.3 million in several non-traditional exchange-traded funds (ETFs) and for investments of approximately $500,000 in several different equities, including approximately $375,000 in stocks issued by companies in the metals and mining sector.”
A letter of Acceptance, Waiver and Consent (No. 2016048675901) signed by H. Beck and submitted to FINRA states further: “Between 2008 and 2011, H. Beck’s registered representative James Dresselaers recommended to the Firm’s customer, EB, investments in several nontraditional exchange-traded funds (“ETFs”) and stocks issued by companies in the metals and mining sector. These recommendations were unsuitable for EB, a professional athlete with no investment experience, a moderate risk tolerance, and an investment objective of long-term growth. EB suffered losses of more than $1.1 million on these investments. Additionally, from at least July 2008 until June 2013, H. Beck failed to properly supervise the sale of nontraditional ETFs and failed to properly supervise the recommendations made by its registered representative to EB.” The firm was censured and issued a fine of $50,000.
H. Beck has received 19 other disclosure events listed on its BrokerCheck report. In 2015 it was sanctioned by FINRA and fined $40,000 by FINRA in connection to allegations it failed to conduct adequate due diligence and address red flags connected to three private placement offerings. In that same year, it was sanctioned and fined $425,000 by FINRA following allegations it failed to identify and apply sales charge discounts to eligible purchases of unit investment trusts.
Investors considering investments in non-traditional exchange-traded funds can research the products on FINRA’s investor resources, and can research the backgrounds of FINRA-licensed broker-dealer firms using the BrokerCheck tool.