Daniel Beech received a Wells notice, the initiation of a regulatory investigation, from FINRA in July 2023. FINRA is the Financial Industry Regulatory Authority overseeing the securities brokerage industry at the direction of the Securities and Exchange Commission.
The Wells Notice stems from an inappropriate splitting of fees with a non-financial advisor. FINRA determined preliminarily that Beech deserved discipline for violating regulatory rules concerning payment of fees to unlicensed individual for the sale of securities in a manner that violated the standards of commercial honor set by the regulator.
Beech is also currently the subject of 15 lawsuits by investors against his current or previous employers. The lawsuits stem from misrepresentations of investments. The investments were a level of risk inconsistent with the level of risk sought by his investors. This is commonly referred as a “suitability violation.”
Each security recommendation from a financial advisor is legally required to be suitable for that investor. Representing an investment inaccurately as to risk is fraud. An example would be the representation of a speculative investment, such as a REIT, as moderate risk.
Further, the failure to disclose that an investment is inconsistent with an investor’s risk tolerance is not only a fraudulent non-disclosure but also a violation of FINRA rules. FINRA requires that a financial advisor know the investor and only make recommendations consistent with the investor’s risk tolerance and investment objectives.
Daniel K. Beech worked as a financial advisor since 2013. He initially worked Royal Alliance and Independent Financial. However, most of his misdeeds appear to have occurred while under the supervision of Western International.
Contact us if you were an investor of Beech. Investment fraud exists because of its difficulty to detect. Many investors are victims of fraud without knowing it. We have helped hundreds of investors determine whether fraud exists in their portfolio. Initial consultations are free and confidential.