H. Beck censured, fined $50,000 for unsuitable ETF trades

Letter of consent comes after firm paid $1.5 million in related arbitration case.

Broker-dealer H. Beck, based in Bethesda, Md., has consented to a Finra censure and a fine of $50,000 over making unsuitable recommendations of nontraditional and leveraged exchange-traded funds.

The Financial Industry Regulatory Authority said that between 2008 and 2010, James Dresselaers — a registered representative and currently executive vice president of the firm — recommended investments in several nontraditional ETFs and stocks issued by companies in the metals and mining sector. Finra said these recommendations were unsuitable for the client, a professional athlete with no investment experience, who had a moderate risk tolerance and an investment objective of long-term growth.

The client suffered losses of more than $1.1 million on these investments, which Finra said are intended for short-term traders. It also said that from at least July 2008 until June 2013, the firm failed to properly supervise the sale of nontraditional ETFs and failed to properly supervise recommendations to the client made by Mr. Dresselaers, who served as president of the firm from 2013 to 2016.

Finra noted that before the firm consented to the censure and fine, it had paid the client in question $1.5 million to settle his arbitration claims against H. Beck, which is owned by Securian Financial Group. The claims arose, in part, from Mr. Dresselaers’ recommendations. As a result, H. Beck is not required to make restitution as part of the current settlement.