Securities Lawyers Blog
According to records kept by The Financial Industry Regulatory Authority (FINRA) financial Broker Joseph Beam (Beam), previously associated with Capital Investment Group, Inc., has at least 8 disclosable events. These events include 8 customer complaints, alleging that Beam 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 $225,000.00 on January 28, 2025.
GWG Holdings, Inc. filed Chapter 11 bankruptcy on April 20, 2022. The Statement of Claim alleged that the product recommended to, and purchased by clients, GWG L-Bonds, was unsuitable in nature. Allegations include violations of federal securities laws, violation of North Carolina Securities Act, violation of South Carolina Securities Act, breach of contract, common law fraud, breach of fiduciary duty and, negligence and gross negligence.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $190,000.00 on December 20, 2024.
Robert M. Roper, specifically, purchased, on separate occasions in 2019 and 2020, a total of $190,000 of GWG Holdings, Inc. L-Bonds. GWG Holdings filed Chapter 11 bankruptcy on April 20, 2022. Complaint alleges violations of federal securities laws; violation of NC Securities Act; Violation of New York Consumer Protection Act; Violation of South Carolina Securities Act; breach of contract; common law fraud; breach of fiduciary duty, and; negligence and gross negligence. The other claimants listed on the Statement of Claim were of other representatives, not Mr. Beam. The damage amount for Mr. Roper, specifically, was $190,000.
FINRA BrokerCheck shows a settled customer complaint with a damage request of $28,000.00 on October 21, 2024.
GWG Holdings, Inc. filed Chapter 11 bankruptcy on April 20, 2022. Relative to specific investments made by clients, claims include breach of fiduciary duty, negligence and negligent misrepresentation, breach of contract, failure to supervise and, negligence – violation of Regulation Best Interest.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $175,000.00 on July 18, 2024.
GWG Holdings, Inc. filed Chapter 11 bankruptcy on April 20, 2022. Complaint alleges failure to conduct reasonable diligence related to an investment in GWG L-Bonds.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $357,000.00 on May 17, 2024.
[REDACTED]: Client purchased, on separate occasions in 2020 and 2021, a total of $55,000 of GWG Holdings, Inc. L-Bonds. GWG Holdings filed Chapter 11 bankruptcy on April 20, 2022.Complaint alleges violations of federal securities laws; violation of NC Securities Act; breach of contract; common law fraud; breach of fiduciary duty, and; negligence and gross negligence. The compensatory damage amount listed in the Statement of Claim was, in total, for four separate clients of the firm, of which [REDACTED] was one. The other three customers were of other representatives, not Mr. Beam. The damage amount for [REDACTED], specifically, was $55,000.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $195,000.00 on May 15, 2024.
GWG Holdings, Inc. filed Chapter 11 bankruptcy on 04/20/2022. Complaint alleges unsuitable investments, failure to act in the best interest of the Claimants, misrepresentations and omissions, breach of fiduciary duty, breach of contract, failure to supervise, negligence and violation of federal and state securities laws, as related to the sale of GWG L Bonds.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $400,000.00 on April 18, 2024.
GWG Holdings, Inc. filed Chapter 11 bankruptcy on April 20, 2022. Complaint alleges failure to conduct reasonable due diligence on GWG L Bonds. The Statement of Claim only lists [REDACTED] as a claimant, but $300,000 of the bonds were purchased in a joint account with [REDACTED] in 06/2021.
FINRA BrokerCheck shows a pending customer complaint with a damage request of $100,000.00 on November 16, 2023.
Product recommended and purchased by clients, GWG Holdings, Inc., was unsuitable in nature. Allegations include breach of contract and warranties, violation of state securities statutes, breach of fiduciary duty, claims under common law, and vicarious liability. For the purpose of full transparency, although the representative was not named as a respondent, he was clearly referenced in the Statement of Claim.
Under the securities laws brokers are obligated to act in their clients’ best interests and provide only suitable recommendations for investments to the client. In addition, the SEC has promulgated ‘Regulation Best Interest (Reg BI)‘ which according to the SEC enhanced the broker-dealer standard of conduct beyond existing suitability obligations and requires broker-dealers to act in the best interest of a retail customer when making a recommendation of any securities transaction or investment strategy involving securities. Regulation Best Interest and the fiduciary standard for investment advisers are drawn from key fiduciary principles that include an obligation to act in the retail investor’s best interest and not to place their own interests ahead of the investor’s interest.
Brokers have an obligation to first obtain and evaluate sufficient information about a retail investor to form a reasonable basis to believe the account recommendations are in the retail investor’s best interest. Recommendations cannot be based on materially inaccurate or incomplete information. Data on the investor and the expense of the advice are consistently part of material information. Types of costs that must be considered including account fees, commissions and transaction costs, tax considerations, as well as indirect costs.
In addition to obligation to understand the customer the broker must also investigate the product being sold. FINRA firms have an obligation to conduct a reasonable investigation of the issuer and the securities they recommend in offerings. A brokerage firm has a special relationship with a customer from the fact that in recommending the security, the broker represents to the customer that a reasonable investigation has been made. Accordingly, a brokerage firm may not rely blindly upon the issuer for information concerning a company in lieu of conducting its own reasonable investigation.
Another protective measure for investors is to mandate broker discloses. Brokers must publicly disclose reportable events on their BrokerCheck reports that include customer complaints, IRS tax liens, judgments, investigations, terminations, and even criminal matters. FINRA has acknowledged that recent studies provide evidence of the predictability of future regulatory and customer complaint issues for brokers with a history of such events. FINRA’s Office of the Chief Economist (OCE) published a study showing the predictability of disciplinary and disclosure events based on past similar events. The OCE study showed that past disclosure events, including regulatory actions, customer arbitrations and litigations of brokers, have significant power to predict future investor harm. The data shows that where a member firm on-boards brokers with a significant history of misconduct there is a high likelihood that the broker will continue to engage in similar behavior.
Beam has been in the securities industry for more than 15 years. Beam has been registered as a Broker with Capital Investment Group, Inc. since 2013.
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.