Finra Fines JPMorgan Broker Trying to Do Customers a Solid
The Financial Industry Regulatory Authority sent more messages this week to advisors and their staff this week about the importance of toeing the regulatory line, even when they may think it may be illogical.
Finra on Wednesday fined Beal $5,000 and suspended her for two months, according to a letter of acceptance, waiver and consent she signed. Beal, who has not re-registered as a broker, did not receive any compensation for the transactions, and reported them the same day she made them to her supervising broker, who in turn notified J.P. Morgan, the document said.
The customers suffered no losses and were not charged any transaction fees, according to the consent letter, which Beal signed without admitting or denying Finra’s findings.
The industry self-regulator said her unauthorized transactions violated its wide-ranging Rule 2010 requiring brokers to “observe high standards of commercial honor and just and equitable principles of trade,” according to the settlement letter.
Beal, who was based in Downers Grove, IL, and represented herself in the enforcement case, could not be reached for comment. She had been a registered rep for five years when she was dismissed, and had no previous disciplinary history, the Finra document said.
Bill Singer, a securities lawyer who blogs about Finra regulatory decisions, said Beal was likely a registered associate who took the fall for actions sanctioned or ordered by her boss.
“I’m really not buying the Beal AWC,” Singer said. “Yet again, how convenient—the female assistant gets thrown under the bus.”
In another consent letter Finra accepted on Wednesday, Finra sent a message to senior brokers about following the letter of the law.
Jay H. Bluestine, a broker for 22 years in New York City, borrowed $200,000 from a customer who was “also a friend” in 2016 while he was associated with UBS Wealth Management USA, and borrowed $100,001 in 2018 from the same customer after he had voluntarily moved to Raymond James & Associates, according to the consent letter he signed.
Raymond James fired Bluestine in November 2018 for “introducing a client to an investment away from the firm without firm approval,” according to the document.
Finra on Wednesday added a three-month suspension and $5,000 fine for violating its catchall Rule 2010 and its Rule 3240 requiring brokers to have firm approval before accepting loans from customers.
Bluestine now runs Blue Square Wealth, a Manhattan registered investment advisory firm that managed $176 million as of December 2019, according to its latest Form ADV filing with the Securities and Exchange Commission. He did not immediately return a request for comment.
Bluestine was managing $150 million in client assets in 2017 when he joined Raymond James, the company said in a press release at the time he joined from UBS. He started his career at Sands Brothers in 1996 and also worked at Oppenheimer/CIBC World Markets (and its Fahnestock & Co. predecessor), Merrill Lynch, and Morgan Stanley before joining UBS in 2011.
The Finra suspension affects his ability to practice as a broker but not his investment adviser registration overseen by the SEC. Bluestine’s $5,000 fine is due only if he re-associates with a Finra member firm or seeks to overturn the disqualification, according to the consent letter. As is typical, he accepted the sanctions without admitting or denying the enforcement findings.