Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Mark Beloyan (Beloyan), previously associated with Tradespot Markets INC., has at least one disclosable event. These events include one regulatory event, alleging that Beloyan recommended unsuitable investments in different investment products including debt securities among other allegations and complaints.
FINRA BrokerCheck shows a final customer complaint on September 13, 2022.
Beloyan was named a respondent in a FINRA complaint alleging that he facilitated the liquidation of shares of common stock of a company to the investing public when there was no registration statement filed or in effect or exemption from registration available with respect to those transactions in contravention of Section 5 of the Securities Act of 1933 (Section 5). The complaint alleges that Beloyan was a necessary participant and substantial factor in the sale of the common shares on behalf of the customers because, among other things, he opened all of the customer accounts, reviewed and approved all of the deposits of the company, executed all of the sales through Beloyan’s former member firm, served as the registered representative for the customers’ accounts, and was solely responsible for all supervision and compliance functions at the firm. The complaint also alleges that Beloyan failed to reasonably supervise the firm’s compliance with Section 5. As the firm’s AML compliance officer, Beloyan was responsible for the firm’s supervision and compliance with FINRA rules and the federal securities laws. In violation of the firm’s WSPs, Beloyan failed to investigate red flags of violative activity and failed to conduct due diligence sufficient to determine that the sales of shares of the company through the firm were registered or, if not, were exempt from registration. To the contrary, Beloyan was aware, or through reasonable diligence should have been aware, of facts that supported the conclusion that these sales were part of an unregistered distribution. The complaint further alleges that Beloyan failed to implement an AML program reasonably designed to achieve and monitor the firm’s compliance with the Bank Secrecy Act and its implementing regulations, including the ability to detect and cause the reporting of suspicious activities. Beloyan also failed to detect and, if detected, failed to investigate red flags to make a determination of whether to file a suspicious activity report (SAR). Beloyan separately was aware, or through reasonable due diligence should have been aware, of numerous red flags of potentially suspicious activity in connection with an entirely different group of customer accounts. The firm, Beloyan, and a firm registered representative opened three nominee accounts for three nominee customers. At the time, the SEC had twice sued a person in connection with unrelated penny-stock manipulation schemes. When the firm’s clearing firm asked directly about the relationship of the person to the second nominee customer, Beloyan misrepresented the nature of the relationship and denied the person’s involvement in the account despite both Beloyan, and the representative having taken instructions directly from the person in the opening and funding of that account. In addition, the complaint alleges that Beloyan misled the clearing firm. Acting on behalf of the firm, Beloyan sent a false response to an AML risk analyst employed by the clearing firm that concealed the second nominee customer’s relationship to the person. In response to the risk analyst’s inquiry, Beloyan misleadingly stated that he reviewed the report that was provided by the clearing firm, and he doesn’t believe the entity bares any relations to the account that was opened. However, the entity named in the report had a nearly identical name to the second nominee customer, both had a primary location in Hong Kong, and, that the person was involved in opening the second nominee customer’s account at the firm. At the time he made this representation, Beloyan was aware of a connection between the second nominee customer and the person, and therefore, the entity identified on the report did bear relation to the account opened by the firm. Beloyan also represented that there was a referral from another person who the broker has known for 15 years, which was false because he knew that the person referred the account to the firm.