TradeSpot Markets Inc. (TradeSpot) and its President, Chief Operating Officer and owner Mark Beloyan of Davie, Florida were named as Respondents in a Financial Industry Regulatory Authority (FINRA) complaint that alleges the firm, acting through its representatives, engaged in penny stock transactions without complying with Section 15(h) and Rule 15g-9 of the Securities Exchange Act of 1934 and FINRA conduct rules.
Section 15(h) of the Exchange Act prohibits brokers and dealers from “using the mails or any means or instrumentality of interstate commerce to effect any transaction in penny stock by any customer except in accordance with the requirements of Section 15(h) and the rules and regulations prescribed thereunder.” Rule 15g-9 of the Exchange Act makes it “unlawful for a broker or dealer to sell a penny stock to, or to effect the purchase of a penny stock by, any person unless, prior to the transaction, the broker or dealer has approved the person’s account for transactions in penny stocks and has received from the person an agreement to the transaction.”
FINRA’s investigators allege that Mr. Beloyan, though TradeSpot, sent customers a Customer Suitability Statement for their review and signature without first documenting an affirmative determination of suitability on the document as well as inappropriately completing information on Customer Suitability Statements and Agreement to Purchase forms before sending the documents to customers. Additionally, FINRA alleged that TradeSpot, acting through Mr. Beloyan, failed to complete the Customer Suitability Statement or Agreement to Purchase form for a customer and falsified records for a customer. These alleged violations in turn caused TradeSpot’s books and records to be inaccurate, in violation of Section 17(a) of the Exchange Act and Rule 17a-4 thereunder and FINRA Rules 4511 and 2010.
FINRA has requested findings and conclusions of law that Mr. Beloyan, through TradeSpot, willfully violated Section 15(h) of the Exchange Act and Rule 15g-9 thereunder and Section 17(a) of the Exchange Act and Rule 17a-4 thereunder and one or more of the sanctions provided under FINRA Rule 8310(a) be imposed, including that Mr. Beloyan and TradeSpot be required to disgorge fully any and all ill-gotten gains and/or make full and complete restitution, together with interest.
FINRA rules require brokerage firms to establish and implement a reasonable supervisory system to protect customers from the risks associated with investing. The implementation of the rules requires supervisors to monitor their employees to ensure compliance with federal and state securities laws, securities industry rules and regulations, as well as the brokerage firm’s own policies and procedures. If broker-dealers and their supervisors fail to establish and implement these protective measures, they may be held liable to account holders for investment losses which stem from their employees’ misconduct. Therefore, investors who have suffered losses due to a brokerage firm’s failure to supervise the unsuitable recommendations of its representatives can bring forth claims to recover damages against firms, like TradeSpot Markets, which have a duty to supervise employees in order to protect their customers’ interests.
Have you suffered losses in your TradeSpot Markets account due to unsuitable broker transactions that don’t comply with the Securities Exchange Act? If so, call Robert Pearce at the Law Offices of Robert Wayne Pearce, P.A. for a free consultation. Mr. Pearce is accepting clients with valid claims against TradeSpot Markets stockbrokers who may have engaged in misconduct and caused investors losses.
The most important of investors’ rights is the right to be informed! This Investors’ Rights blog post is by the Law Offices of Robert Wayne Pearce, P.A., located in Boca Raton, Florida. For over 40 years, Attorney Pearce has tried, arbitrated, and mediated hundreds of disputes involving complex securities, commodities and investment law issues. The lawyers at our law firm are devoted to protecting investors’ rights throughout the United States and internationally! Please visit our website, www.secatty.com, post a comment, call (800) 732-2889, or email Mr. Pearce at firstname.lastname@example.org for answers to any of your questions about this blog post and/or any related matter.