Rogue Broker Alchemy: How to Squeeze $66K from a $70K Account
Edward Beyn has given new meaning to the word chutzpah, generating $65,802 of fees and commission in less than four months from an account that began with under $70,000, according to a complaint filed this week by the Financial Industry Regulatory Authority.
Beyn in total collected about $1.7 million from six clients between February 2012 and May 2015 by “churning” more than 2,000 trades while working at Craig Scott Capital, LLC, the industry-financed regulator charged in a filing on Wednesday. The clients had about $4.3 million spread over nine accounts.
Beyn did not respond to a call seeking comment. He currently works at Rothschild Lieberman, another firm in New York City’s Long Island suburbs, according to his BrokerCheck record. An official at Rothschild was not immediately available for comment.
Finra canceled Craig Scott Capital’s broker-dealer license in January due to “failure to pay outstanding fees” of approximately one hundred thousand dollars, according to Finra’s BrokerCheck.
The complaint comes as the retail brokerage industry is under new attack for failing to police rogue brokers. An academic paper found that 44% of brokers fired by one firm affiliate with another within a year. Finra has said that it is making compliance culture an examination priority this year.
The Finra complaint alleges that Beyn acted with “intent to defraud and/or with reckless disregard” of customers while “seeking to maximize his own remuneration.”
Finra, which is financed by the securities industry that it helps regulate, last year put on hold a data collection program called CARDS (Comprehensive Automated Risk Data System) that is meant to monitor brokers for excessive trading and unsuitable investments. The industry has objected to the costs and alleged redundancies of implementing such a system.