National investment loss lawyers KlaymanToskes reports that FINRA has fined and suspended Ex-Edward Jones broker Mary C. Beslagic for violating Regulation Best Interest (Reg BI) by making unsuitable investment recommendations that ignored her clients’ liquidity needs and risk tolerance, resulting in significant financial losses.
According to FINRA’s letter of Acceptance, Waiver, and Consent (“AWC”), Mary C. Beslagic, a former Edward Jones broker based in Manchester, Washington, violated Reg BI by advising a married couple in March 2022 to invest $220,000—obtained from a home equity loan—into long-term mutual funds.
This recommendation reportedly came despite her knowledge that the clients intended to use the funds in the near term to purchase a home for a family member and renovate their own home. Soon after the mutual funds were purchased, their value declined, forcing the clients to sell a portion of their investment at a loss. To make up the shortfall for their projects, the couple also had to take out a $25,000 margin loan.
FINRA found that Beslagic’s recommendation violated the Securities and Exchange Commission’s Reg BI, which requires brokers to consider their clients’ comprehensive investment profiles, including time horizon, risk tolerance, and liquidity needs. This also triggered a violation of FINRA Rule 2010, which mandates brokers to uphold high standards of commercial honor.
FINRA noted that it had previously issued a regulatory notice warning brokers about the “suitability concerns” of investing “liquefied” home equity, underscoring the heightened responsibility brokers have when recommending such funds.
If you have suffered losses due to unsuitable investment advice or broker misconduct, contact KlaymanToskes at 888-997-9956 or fill out a short contact form for a free and confidential consultation to discuss your potential recovery options.
KlaymanToskes is a leading national securities law firm which practices exclusively in the field of securities arbitration on behalf of retail and institutional investors throughout the world in large and complex securities matters. The firm has recovered over $250 million in FINRA arbitrations and over $350 million in other securities litigation matters. KlaymanToskes has office locations in California, Florida, New York, and Puerto Rico.
KlaymanToskes, P.A.
Lawrence L. Klayman, Esq.
888-997-9956
investigations@klaymantoskes.com
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