Broker Daniel Beech Subject Of 18 Customer Disputes

Daniel Beech (Daniel Keith Beech CRD# 6169844) is a registered broker and investment advisor currently employed with Innovation Partners LLC (CRD# 146344) of Charlotte, NC. His previous employers were Western International Securities (CRD# 39262) of Westlake Village, CA, Independent Financial Group, LLC (CRD# 7717) of Sherman Oaks, CA, and Royal Alliance Associates, Inc. (CRD# 23131) of Los Angeles, CA. He has been in the industry since 2013.

Beech’s CRD includes 18 customer disputes, 12 of which have been settled. The other 12 were filed between 11/03/2022 and 02/05/2024 and are currently listed as “pending.”

Several of these customer dispute disclosures list clients seeking reimbursement for their investments. Others have similar allegations of unsuitability, negligence, performance issues, “unjust enrichment,” and misrepresentation. One of the “pending” disputes specifically mentions GWG Holdings. Collective damages for these 12 pending customer disputes total $786,000.01.

The settled claims included similar allegations. The clients requested a total of $2,563,150.00 in damages, and the disputes were collectively settled for $1,031,772.99.

FINRA Disciplinary Action

Separate from these customer disputes is a FINRA disciplinary action in which Beech allegedly entered into an agreement to pay “an unregistered person” $10,000 for the purchase of their book of business.

The agreement included 75% of commissions from the book for ten years and 25% of commissions for an additional five years thereafter, ending in 2031. The individual from which Beech purchased this book was not registered either at the time of the sale or afterward, even though registration was a requirement. The agreement was not reviewed or approved by any FINRA broker-dealer.

The unregistered person was previously a registered representative whose clientele consisted primarily of individuals who spoke Farsi. Beech worked as their sales assistant until moving to another firm, where the individual was found to be engaged in “selling away,” and signed a Letter of Acceptance, Waiver & Consent (AWC) in December of 2015. The person was fined and suspended, and never re-associated with a FINRA member. Both voluntarily terminated their employment on April 29, 2016.

While still at the prior firm, Beech and the other individual entered into the purchase agreement before moving to Western. Because Beech does not speak Farsi, the agreement allowed the other individual to continue serving customers as a translator. The individual continued to solicit new customers for Beech using his own Farsi-language radio and television shows, directing customers to Beech. The individual also attending meetings with and without Beech, making recommendations, and received commissions from the sales, all without being registered. From May 2016 through at least January 2023, Beech paid this unregistered individual approximately $900,000. On April 30, 2023, Beech and the individual terminated their purchase agreement.

This FINRA disciplinary action was filed on 12/18/2023 and is currently “pending.”

Beech’s two remaining disclosures were a civil judgment from 2008 with continual payments and a criminal case from 2011 involving a billing error on a returned rental car.

What Does “Unsuitability” Mean?

Brokers and broker-dealers are required to make sure that their suggested investments have been vetted and determined to be in the client’s best interest without any conflicts of interest or extra incentives involved.

The SEC’s Regulation Best Interest (Reg BI) requires that brokers and broker dealers exercise reasonable care, diligence and skill when making a recommendation to a retail customer. They must also disclose any conflicts of interest or incentives (such as commissions or bonuses) that might be included when they sell such a security.

Previously, brokers were only held to the standard of “suitability,” leading to allegations of “unsuitability.” Under Regulation Best Interest, brokers have a higher standard than simply suitability. Brokers are required to consider how well an investment suits each individual retail customer based on their profile and investment objectives.

In Beech’s case, he failed on multiple occasions to consider each client’s best interests as required by Reg BI. If you believe your broker has made unsuitable recommendations, we invite you to consult with our securities law attorneys to discuss your accounts.

Regulation Best Interest In Action

In 2022, a company called Western International Securities was the first broker dealer to be sanctioned under Reg BI for their sales of the now-defunct GWG Holdings’ investment called L-Bonds. The firm and five of its brokers were sanctioned under the new Reg BI for violating the “best interest” rule. These bonds were clearly not suited for retail customers. But Western and its brokers continued to recommend L-Bonds to their customers despite the statements in the prospectus.

The brokers also failed to consider the customers’ investment objectives and profiles. They failed to complete due diligence when recommending speculative securities to customers who were interested in conservative investments. The broker-dealer used outdated compliance information, and failed to train the brokers in Reg BI and make changes to its own internal processes for compliance with Reg BI.

Did You Invest With Daniel Beech?

Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses due to stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345 and let us know how we can help.