Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Beliveau Bays (Bays), previously associated with Tcfg Wealth Management, LLC, has at least 2 disclosable events. These events include one customer complaint, one regulatory event, alleging that Bays recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $250,000.00 on December 18, 2023.
Claimants allege misrepresentation and unsuitable recommendations based on false information with regard to the purchase of a variable annuity and REIT.
FINRA BrokerCheck shows a final customer complaint on October 17, 2023.
Bays was named a respondent in a FINRA complaint alleging that Bays electronically signed the name of customers on account applications and an account transfer form without the customers’ knowledge or permission. The complaint alleges that Bays provided false, incomplete, and misleading responses to FINRA requests for information and documents and during on-the-record testimony in connection with its investigation into allegations in Bays’ initial Form U5 and customer complaints reported in an amended Form U5. The Form U5 stated that Bays’ employment was terminated after he provided misrepresentations to his member firm in response to inquiries surrounding his submission of key person life insurance applications for non-licensed assistants. The customer complaints reported in the amended Form U5 alleged that Bays forged the customers’ signatures on account applications. Bays responded to a request in writing stating that he was not aware of life insurance policies being sold to two associated persons and that he was not aware of any commissions being earned. Bays’ response was false and misleading. At the time of Bays’ response, he had earned over $720 in commissions from a still active life insurance policy for one associated person issued by an insurance company, and over $561 in commissions from a still active insurance policy for the other associated person issued by another insurance company. The complaint also alleges Bays gave false and misleading statements to insurance companies, FINRA, and his firm. Bays provided false and misleading information on insurance applications, in a Professional Profile form, in an email, in response to a FINRA request, including requests that do not specifically cite FINRA Rule 8210, and falsely stated that one of the associated persons did not have accounts under Bays’ management at the firm. The complaint further alleges that Bays caused his firm to make and preserve inaccurate books and records by forging the customers signatures and by overstating customers annual income and net worth on new account applications.
Brokers are required to adhere to the SEC’s Regulation Best Interest (Reg BI) standard of care under the Securities Exchange Act of 1934 which establishes a ‘best interest’ standard for broker-dealers and associated persons. This standard applies when brokers make recommendations to retail customer for any securities transaction or investment strategy involving securities, including recommendations of types of accounts. Reg BI is drawn from fiduciary principles that include an obligation to act in the retail investor’s best interest and the broker is prohibited from placing their own interests ahead of the investor’s interest.
There are several different aspects of the rule that brokers must comply with. One of which is the care obligations which requires brokers to form a reasonable belief that their investment advice and recommendations are in the retail investor’s best interest. The care obligations includes three components. First, the advisor must have an understanding of the potential risks, rewards, and costs associated with a product, investment strategy, account type, or series of transactions. Next, the advisor must have a reasonable understanding of the specific retail investor’s investment profile. The customer’s profile information generally includes an investor’s financial situation and needs; investments; assets and debts; marital status; tax status; age; investment time horizon; liquidity needs; risk tolerance; investment experience; investment objectives and financial goals; and any other information the retail investor may disclose in connection with the recommendation or advice. Finally, the advisor must use their knowledge of the first two elements to consider reasonably available investment option alternatives and come to the conclusion that there is a reasonable basis to believe that the recommendation or advice being provided is in the retail investor’s best interest.
Brokerage firms and advisors must also understand the features and limitations of various account types as part of meeting Reg BI’s care obligations. Firms typically offer a variety of account options and services with different trading costs, services, such as account and activity monitoring. An advisor’s recommendation as to what type of securities account to open can alter the customers’ overall costs and investment returns. The advisor must determine that the client can benefit from the type of account being recommended to be opened and in the investor’s best interest taking into account the costs, benefits, and needs of the client.
Bays has been in the securities industry for more than 8 years. Bays has been registered as a Broker with Tcfg Wealth Management, LLC since 2021.
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.