- October 16, 2020
- W&S Brokerage Services
Marcus Beasley (CRD# 3157595) was in the securities industry from 1999 to 2019. Marcus Beasley worked at six different brokerage firms including Supreme Alliance LLC, W & S Brokerage Services, Inc. (Owen Mill, MD), Allstate Financial Services, LLC (Columbia, MD) and NY Life Securities LLC (Timonium, MD)
According to publicly available records released by the Financial Industry Regulatory Authority (FINRA), on July 12, 2019, Marcus Beasley was terminated by his employer following allegations “(i) failing to disclose and receive approval prior to engaging in an outside business activity; (ii) solicitation of capital related to undisclosed outside business activity; (iii) lacking candor during investigation into this activity; and (iv) violating firm policies regarding outside business activities and private securities transactions.”
For a copy of Marcus Beasley’s CRD, click here
This prompted an investigation by FINRA, which resulted in a seven month sanction and $12,500 fine. According to the FINRA Sanction:
“Without admitting or denying the findings, Beasley consented to the sanctions and to the entry of findings that he engaged in outside business activities without providing prior written notice to his member firms…Beasley personally invested $40,000 in the company and attempted to establish it, through its website, as a financial services marketplace to provide financial counseling services and to connect subscribers with other financial services. In exchange, the company hoped to earn periodic subscriber fees….While the company was soliciting potential partners and investors, Beasley stated on its website that, based on industry standards and company projections, the average annual gross income for partners in the company is projected to be anywhere between $500 and $2,000. This statement was false and misleading in that the company did not have any partners who generated any revenue at any time through the company and there was no factual basis for this income projection. … Beasley solicited investors on an outside social media website to invest $250,000 in the company in exchange for a 20 percent equity stake in the company. The solicitation was unclear about what type of transaction was being offered, or how it was structured, and therefore failed to provide a sound basis for evaluating the investment and omitted significant, material information, causing the communication to be misleading. The solicitation further did not properly identify or disclose the potential risks and investment considerations of the proposed investment. At no time thereafter did Beasley provide any additional information to potential investors about his investment proposal. In the same solicitation, Beasley stated that the company had 25 partners across multiple states. This statement was false and misleading because the company did not have any partners.”
The Financial Industry Regulatory Authority (FINRA) strictly prohibits financial advisors from “selling away” or selling securities and investments to clients that are not offered by the brokerage firm with which they are employed. For example, it is illegal and a violation of industry rules for a financial advisor to recommend or even suggest that a client invest in the financial advisor’s own business or a business operated by his or her friends or family. It is not necessary that the financial advisor earn any compensation for recommending an outside investment.
The purpose behind this prohibition is to ensure that a financial advisor only offers to sell securities that have been vetted by his or her employer brokerage firm through a rigorous due diligence process. Most brokerage firms have an approved list of investments, products, and research that can be provided or made available to clients. Any deviation by the financial advisor from the approved product list may constitute selling away.
The Wolper Law Firm represents investors nationwide in securities litigation and arbitration on a contingency fee basis. Matt Wolper, the Managing Principal of the Wolper Law Firm, is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities. Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters. We can be reached at 800.931.8452 or by email at firstname.lastname@example.org.