Mark Beloyan – Investor Alert
Galvin Legal is launching an investigation on behalf of investors who may have suffered losses investing with Mark Beloyan. If you suffered losses investing with Mark Beloyan, then Galvin Legal may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim.
Mark Beloyan (CRD# 1392748)
As of December 2, 2016, Mark Beloyan’s FINRA BrokerCheck Report contains the following:
05/04/2016 Regulatory – Final
Initiated By FINRA
Beloyan was named a respondent in a FINRA complaint alleging that while acting through his member firm as its President, Chief Operating Officer, and owner, Beloyan recommended penny stocks and engaged in penny stock transactions without complying with the requirements for penny stock transactions enumerated under Section 15(h) and Rule 15g-9 of the Securities Exchange Act of 1934 (Exchange Act). The complaint alleges that in connection with penny stock transactions through the firm, Beloyan sent customers a Customer Suitability Statement for their review and signature without first documenting an affirmative determination of suitability on the document, as required under Rule 15g-9. The complaint also alleges that Beloyan falsified records. The firm, acting through Beloyan, amended Customer Suitability Statements for a customer by changing the date next to his signature on each document. For each of the documents, the original date next to Beloyan’s signature reflected a date later than the date next to the customer signature on the Agreement to Purchase form. For each of the Customer Suitability Statements, Beloyan crossed out or otherwise altered the original date to reflect a new date that was earlier than the date appearing next to the customer signature on the corresponding Agreement to Purchase form. The complaint further alleges that the firm, acting by and through Beloyan, failed to maintain accurate books and records in connection with its penny stock documents. The firm, acting through Beloyan, created and maintained incorrectly prepared Customer Suitability Statements and created and incorrectly prepared Agreement to Purchase forms for customers. Because Beloyan entered a date next to the customer signature line prior to sending the documents to certain of the customers for signature, those Customer Suitability Statements may not reflect the dates that customers signed the documents. Beloyan’s amendment of the dates on Customer Suitability Statements for a customer to earlier dates also caused those Customer Suitability Statements to be inaccurate. In addition, the complaint alleges that the firm’s written supervisory procedures (WSPs) were deficient in connection with the penny stock rules. Beloyan was responsible for implementing and updating the firm’s WSPs Manual.
Resolution: Decision & Order of Offer of Settlement
Duration: 50 days
Duration: 10 days
Sanctions: In light of Beloyan’s financial status, no monetary sanction has been imposed.
Accepted without admitting or denying the allegations in order to resolved this matter. The firm did approximately 2000 trades during the time line and this matter represents less than 12 trades and about $1000 gross commissions. As you can see this is not a big part of the firm’s business.
03/01/2013 Financial – Final
08/14/2012 Financial – Final
12/01/2010 Regulatory – Final
Initiated By FINRA
SECTION 5 OF THE SECURITIES ACT OF 1933, FINRA RULE 2010, NASD RULES 2110, 3010(A) AND (B), 3011(A): FROM APPROXIMATELY MAY 14, 2008, THROUGH DECEMBER 14, 2008, A MEMBER FIRM, THROUGH BELOYAN, SOLD 1,137,336,333 SHARES OF A COMPANY STOCK FOR ONE OF ITS CUSTOMERS. THE SHARES SOLD WERE NOT REGISTERED WITH THE SEC, AND NO EXEMPTION FROM REGISTRATION APPLIED TO THEM, THEREBY THE FIRM, THROUGH BELOYAN, PARTICIPATED IN THE ILLICIT DISTRIBUTION OF MORE THAN 1 BILLION SHARES OF UNREGISTERED AND NON-EXEMPT COMPANY STOCK. THE CUSTOMER OPENED TWO ACCOUNTS AT THE FIRM WITH BELOYAN; OPENING ONE OF THE ACCOUNTS FOR HIM, THE CUSTOMER, AND THE OTHER FOR A COMPANY OF WHICH HE WAS THE SOLE OFFICER AND DIRECTOR. BETWEEN APRIL 2008 AND FEBRUARY 2009, THE CUSTOMERS DEPOSITED NEARLY FIVE BILLION SHARES OF LOW PRICE STOCK IN CERTIFICATE FORM, INTO THEIR RESPECTIVE ACCOUNTS. THEY THEN LIQUIDATED ALL OF THOSE SHARES, TYPICALLY SOON AFTER DEPOSITING THEM, AND WIRED THE PROCEEDS OUT OF THE ACCOUNT, TYPICALLY SOON AFTER THE LIQUIDATIONS. THE LIQUIDATIONS OF THE SHARES OF THOSE STOCKS GENERATED GROSS SALES PROCEEDS OF APPROXIMATELY $663,000 AND GROSS COMMISSIONS PAID TO THE FIRM OF APPROXIMATELY $25,000. PRIOR TO OPENING THE ACCOUNTS, THE CUSTOMER HAD BEEN THE SUBJECT OF DISCIPLINARY ACTIONS BY BOTH NASD AND THE SEC. PRIOR TO OPENING THE ACCOUNTS, BELOYAN WAS AWARE THAT THE CUSTOMER HAD SETTLED A MATTER WITH THE SEC, BUT WAS UNAWARE OF ANY NASD MATTER INVOLVING THE CUSTOMER. DESPITE SUSPICIOUS NATURE OF THE CUSTOMER’S ACTIVITY IN THE SHARES OF THE COMPANY’S LOW PRICED STOCK, SUSPICIOUS NATURE OF THE ACTIVITY IN THE CUSTOMER’S NON-QUALIFIED ACCOUNT, AND THE CUSTOMER’S REGULATORY AND CRIMINAL HISTORY, THE FIRM, THROUGH BELOYAN, FAILED TO CONDUCT THE NECESSARY DUE DILIGENCE TO DETERMINE WHETHER THEY WERE PARTICIPATING IN A SCHEME TO EVADE THE REGISTRATION REQUIREMENTS OF SECTION 5 BY SELLING THE CUSTOMER’S SHARES OF A COMPANY’S LOW PRICE STOCK. THE FIRM, THROUGH BELOYAN AS ITS PRESIDENT AND CHIEF COMPLIANCE OFFICER, FAILED TO ESTABLISH AND MAINTAIN A SUPERVISORY SYSTEM, INCLUDING ADEQUATE WRITTEN SUPERVISORY PROCEDURES, REASONABLY DESIGNED TO ENSURE COMPLIANCE WITH APPLICABLE SECURITIES LAWS AND REGULATIONS, AND WITH APPLICABLE NASD RULES REGARDING THE DISTRIBUTION AND PREVENTION OF THE SALE OF UNREGISTERED AND NON-EXEMPT SECURITIES. BELOYAN, AS THE FIRM’S PRESIDENT AND CCO, HAD SOLE RESPONSIBILITY FOR THE ADEQUACY OF THE FIRM’S SUPERVISORY PROCEDURES, AS WELL AS THE CONTENT OF ITS WRITTEN SUPERVISORY PROCEDURES. THE FIRM, THROUGH BELOYAN, FAILED TO IMPLEMENT OR ENFORCE THE FIRM’S ANTI-MONEY LAUNDERING (AML) PROGRAM BY FAILING TO IDENTIFY SUSPICIOUS ACTIVITY, PROPERLY INVESTIGATE IT, AND FILE A FORM SAR-SF ON SUCH ACTIVITY, AS APPROPRIATE.
Resolution: Decision & Order of Offer of Settlement
Duration: ONE MONTH
Duration: TWO MONTHS
02/02/2009 Regulatory – Final
Initiated By FINRA
NASD RULES 2110, 2210(D) AND 2315(A): RESPONDENT, ACTING ON BEHALF OF A MEMBER FIRM, DRAFTED AND DISTRIBUTED EMAIL CORRESPONDENCE IN WHICH HE RECOMMENDED THE PURCHASE OF A STOCK ISSUED BY A COMPANY TO EXISTING AND PROSPECTIVE CUSTOMERS. IN THE EMAILS, RESPONDENT FAILED TO: PROVIDE A SOUND BASIS FOR HIS RECOMMENDATION OF THE STOCK; PROVIDE A FAIR AND BALANCED PRESENTATION OF THE RISKS ASSOCIATED WITH INVESTING IN THE STOCK; AND DISCLOSE MATERIAL NEGATIVE FACTS REGARDING THE STOCK, SUCH AS A SEC CIVIL ACTION ALLEGING SECURITIES FRAUD VIOLATIONS AGAINST THE COMPANY AND ITS OFFICERS AND A NOTICE TO THE SEC THAT THE COMPANY WAS DEREGISTERING ITS SECURITIES. IN AN EMAIL, RESPONDENT MADE A FALSE AND MISLEADING CLAIM THAT HE WAS BUYING THE STOCK WHEN, IN FACT, HE HAD NOT BOUGHT THE STOCK IN MONTHS AND HAD ACTUALLY BEEN SELLING THE STOCK, AND FAILED TO DISCLOSE THAT HE WAS SELLING THE STOCK. IN ANOTHER EMAIL, RESPONDENT ALSO RECOMMENDED THAT CUSTOMERS PURCHASE STOCK ISSUED BY ANOTHER COMPANY AND FAILED TO: PROVIDE A SOUND BASIS FOR HIS RECOMMENDATION OF THE STOCK; PROVIDE A FAIR AND BALANCED PRESENTATION OF THE RISKS ASSOCIATED WITH INVESTING IN THE STOCK; AND DISCLOSE MATERIAL NEGATIVE FACTS REGARDING THE STOCK, SUCH AS A COMPANY STATEMENT THAT CAST SUBSTANTIAL DOUBT ABOUT THE COMPANY’S ABILITY TO CONTINUE AS A GOING CONCERN. ACTING ON BEHALF OF HIS FIRM, RESPONDENT ALSO RECOMMENDED THE PURCHASE OF THE COMPANY STOCK WITHOUT ANYONE REVIEWING THE COMPANY’S CURRENT FINANCIAL STATEMENTS.
Sanctions: Civil and Administrative Penalty(ies)/Fine(s)
Sanctions: Monetary Penalty other than Fines
Duration: 10 BUSINESS DAYS
AMENDED STATEMENT I CONTINUE TO BELIEVE THAT THE ALLEGATIONS MADE AGAINST ME AND MY FIRM ARE BASELESS. I BELIEVE THAT I PROVIDED ALL THE NECESSARY DISCLOSURES. MULTIPLE WITNESSES AT THE HEARING TESTIFIED THAT I HAD GIVEN THEM MANY AND REPEATED ADEQUATE DISCLOSURES AND THAT I TOLD THEM ON MANY OCCASIONS BOTH ORALLY AND IN WRITING THE ISSUER’S SEC HISTORY. AS THE INVESTORS I HAVE BEEN PRIVILEGED TO SERVE OVER MY 26+ YEAR CAREER IN THE SECURITIES INDUSTRY KNOW, I HAVE ALWAYS BEEN WHOLLY COMMITTED TO SERVING THEIR BEST INTERESTS WITH COMPLETE HONESTY AND INTEGRITY. I WILL CONTINUE TO DO SO.”
Current and Previous Registrations
03/1992 – PRESENT TRADESPOT MARKETS INC. (CRD# 29683) – DAVIE, FL
01/1992 – 03/1992 CORPORATE SECURITIES GROUP, INC. (CRD# 11025) – ST. LOUIS, MO
05/1990 – 01/1992 SUNPOINT SECURITIES, INC. (CRD# 25442) – LONGVIEW, TX
11/1988 – 05/1990 ESCALATOR SECURITIES, INC. (CRD# 16985)
FINRA expelled the firm in 12/1997
FINRA requires brokerage firms to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. Brokerage firms that fail to conduct adequate due diligence or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
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