Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) broker Elvis Beslagic (Beslagic), previously associated with Td Ameritrade, INC., has been subject to at least 2 disclosable events. These events include one customer complaint, one regulatory event. Several of those complaints against Beslagic concern allegations of high frequency trading activity also referred to as churning or excessive trading among other securities laws violations.
FINRA BrokerCheck shows a award / judgment customer complaint with a damage request of $120,750.10 on December 19, 2022.
Elvis Beslagic was named in a customer complaint that asserted the following causes of action: violation of Section 10(b) of the Securities Exchange Act of 1934 and Securities Exchange Commission Rule 10b-5 promulgated thereunder for churning, general anti-fraud, unsuitable securities and transactions as part of a scheme to defraud, discretionary and unauthorized trading and breach of fiduciary duty.
FINRA BrokerCheck shows a final customer complaint on May 27, 2021.
Without admitting or denying the findings, Beslagic consented to the sanctions and to the entry of findings that he posed as a member firm customer to conceal his access to, and trading in, the customer’s self-directed account. The findings stated that the firm prohibited registered representatives from having full or limited trading authority over customer accounts. The firm also prohibited registered representatives from using their personal devices to communicate with firm customers by any method, and specifically prohibited exchanging business-related text messages with customers through personal or firm-issued electronic devices. Beslagic agreed to help the firm customer generate a quick return by executing an options trading strategy in the customer’s self-directed firm account. Because Beslagic was prohibited from accessing or placing trades in customer accounts, the customer provided Beslagic with his account login credentials. Beslagic used his personal cell phone and the customer’s login credentials to access the account and execute trades. Beslagic concealed his trading from the firm by posing as the customer and coordinating the trades by text messages from his personal cell phone. Beslagic exchanged over 1,000 text messages with the customer regarding trade recommendations and specific trades in the customer’s account. The findings also stated that Beslagic caused the firm to maintain incomplete business-related communications. Beslagic did not inform the firm or provide the firm copies of the text messages. Beslagic also falsely certified in his annual compliance questionnaire that he had not placed trades in any unauthorized accounts and that he had complied with the firm’s text message policy.
In a practice known as churning, brokers may execute numerous trades, occasionally involving the same stock, over a brief span. Every month, part of the account are replaced by different securities. The sole purpose of this kind of investment trading activity in a client’s account is to generate commissions that benefit the broker, not the investor. Churning is considered a species of securities fraud. Excessive trading of securities, broker manipulation of the account, and the intent to deceive the investor for illicit commissions form the basis of the claim. A similar claim, excessive trading, under FINRA’s suitability rule involves just the first two elements. Certain commonly used measures and ratios used to determine churning help evaluate a churning claim. These ratios look at how frequently the account is turned over plus whether or not the expenses incurred in the account made it unreasonable that the investor could reasonably profit from the activity.
According to newsources, a study revealed that 7.3% of financial advisors had a customer complaint on their record when records from 2005 to 2015 were examined. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and criminal cases. In addition, research has shown a disturbing pattern with troublesome brokers where brokers with high numbers of customer complaints are not kicked out of the industry but instead these brokers are sifted to lower quality brokerage firms with loose hiring practices and higher rates of customer complaints. These lower quality firms may average brokers with five times as many complaints as the industry average.
Beslagic has been in the securities industry for more than 8 years. Beslagic has been registered as a Broker with Td Ameritrade, INC. since 2017.
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.