The White Law Group reviews the regulatory history of Grove Point Investments (H. Beck) (CRD#: 1763/SEC#: 8-31165).   

Grove Point Financial, founded in 1984 as H. Beck, was reportedly acquired by Kestra Holdings in 2017 and rebranded in 2021. Based in Rockville, Maryland, the dual registered broker/dealer and RIA has approximately 400 independent financial representatives with $15 billion in client assets. According to Investment News, Grove Point had $107 million in revenue in 2022.  

Atria Wealth Solutions will reportedly acquire Grove Point Financial from Kestra Holdings in the second half of 2023, according to Wealth Management on April 21, 2023.  

The following is a brief breakdown of publicly available information regarding Grove Point Investments (formerly known as H. Beck) and its securities sales practices and FINRA regulatory history. FINRA is the self-regulator that oversees brokers and brokerage firms.    

According to its FINRA BrokerCheck report, Grove Point has a large number of disclosures including 17 regulatory actions and 3 arbitrations. To access Grove Point Investments’ full CRD, you can visit https://brokercheck.finra.org.

Regulatory actions can include censures, fines, suspensions, or even the revocation of a broker’s license. These actions indicate instances where the broker or firm has engaged in misconduct or failed to meet regulatory requirements.
 
Arbitration is a dispute resolution process commonly used in the securities industry. BrokerCheck may report arbitration awards related to customer disputes. These awards typically indicate the outcome of arbitration proceedings, which could result in financial compensation for aggrieved customers. The presence of multiple arbitration awards against a broker or firm can indicate a history of unresolved customer complaints or poor conduct.  

Grove Point Investments (H. Beck) Broker Misconduct and Customer Complaints     

There have been several cases of registered representatives employed by Grove Point Financial who were allegedly involved in broker misconduct and fraudulent activities.  Broker dealers are required to supervise their employees. If they fail to do so they may be held liable through a FINRA arbitration claim.   

In December 2019, FINRA revoked the registration of H. Beck advisor James Dresselaers for failure to pay fines and/or costs. FINRA reportedly suspended the advisor in 2017 for among other things, “purchasing securities that were unsuitable for a customer and otherwise trading the customer’s account in an unsuitable manner.” Dresselaers has five customer complaints on is record. Allegations include unsuitable investments in Exchange Traded Funds, Private Placements, and Equity Securities, among others.  

An H. Beck broker in Arlington Heights, Illinois was suspended in 2019 and ordered to pay $10,000 for after he “failed to comply with applicable regulatory requirements governing professional services provided to a client, failed to exercise reasonable and prudent professional judgment in providing professional services to client, and failed to make and/or implement only recommendations that are suitable for a client when he concentrated a client’s portfolio in unsuitable precious metals investments in late 2009 through August 2010.” The advisor reportedly has 6 customer complaints filed against him during his career in the securities industry.  

FINRA Rule 3110 Supervision     

The Financial Industry Regulatory Authority (FINRA) has several rules in place to regulate broker-dealers, including the FINRA Rule 3110 Supervision rule. This rule requires broker-dealer firms to establish and maintain a system to supervise the activities of their associated persons (e.g., brokers) to ensure that they comply with securities laws and regulations.     

Broker-dealers are required to designate an appropriately qualified supervisor who is responsible for the supervision system.  
The rule further requires firms to develop written supervisory procedures (WSPs) that are reasonably designed to achieve compliance with applicable securities laws and regulations, as well as FINRA rules. Then they must implement the WSPs effectively and ensure that they are followed by all associated persons.  
  
FINRA Rule 3110 also requires that broker-dealers establish a process for identifying and responding to red flags that may indicate potential violations or misconduct by associated persons. This includes conducting periodic reviews of customer accounts and transactions, as well as monitoring communications (e.g., email, social media) to detect potential violations.     

FINRA Sanctions Grove Point (H. Beck) for Variable Annuities  

In 2018, FINRA fined Grove Point (H. Beck) $400,000 for failing to enforce its own written supervisory procedures, resulting in the unsuitable sale of L-share variable annuities tied to long-term riders.  

Variable annuity contracts with different share classes come with different surrender periods and fee amounts. B-share contracts, the most common share class, have a seven-year surrender period. Meanwhile, L-share contracts have shorter three- to four-year surrender periods and typically charge higher fees. L-share contracts are generally 35 to 50 basis points higher than most B-share contracts.  

When combined with long-term riders, such as Guaranteed Minimum Income Benefit Riders, a high-fee, short-term L-share contract will stretch to five years or longer for the holder to obtain the full benefit.  H. Beck reportedly failed to set and maintain specific supervisory procedures in compliance with the regulator, and it failed to consider what is suitable in the sales of different variable annuity classes, according to FINRA’s findings. The firm’s WSPs did not address fees, costs and surrender periods in regard to different variable annuity share classes, specifically L-share contracts with long-term horizons.

FINRA also said the firm failed to properly train its representatives to ensure they understood variable annuities and its suitability considerations.  

FINRA Sanctions Grove Point (H. Beck) for Unsuitable Investments   

On September 27, 2017, Grove Point (H. Beck Inc.) was issued an AWC in which the firm was censured and fined $50,000.  

Beck reportedly consented to the sanctions that through a registered representative, they made unsuitable recommendations of nontraditional ETFs and metals and mining stocks to a firm customer.  

FINRA’s findings stated that the customer, a professional athlete with no investment experience, had a moderate risk tolerance and an investment objective of long-term growth. The customer lost a total of $1,115,793 on these investments.  H. Beck reportedly allowed its registered representatives to recommend nontraditional ETFs to their customers without establishing and maintaining a supervisory system reasonably designed to ensure that these recommendations were suitable.

FINRA Fines Grove Point (H. Beck) for Supervisory Failures  

In March 2015, H. Beck was fined $425,000 after it was similarly censured for failing to establish WSPs and a proper supervisory system. Despite establishing new WSPs requiring “heightened reviews,” H. Beck purportedly failed to enforce them in 2016 and 2017.  

FINRA Arbitration Attorney  

When brokers violate securities laws, such as making unsuitable investments, the brokerage firm they are working with may be liable for investment losses through FINRA Arbitration. FINRA arbitration is generally a faster and less expensive alternative to traditional litigation.        

If your broker has defrauded you, you may be able to file a FINRA claim against your brokerage firm. FINRA arbitration can be a complex and technical process, and having an experienced attorney who is knowledgeable about securities law can greatly increase your chances of success.            

The FINRA attorneys at the White Law Group can help you with the many aspects of the arbitration process including evaluating the merits of your claim and determining whether you have a strong case for arbitration.            

The White Law Group will draft a statement of claim and represent you at the arbitration hearing, present evidence and make arguments on your behalf. They may be able to negotiate a settlement for you before going to arbitration.       

Free Consultation with a Securities Attorney   

If you have any questions about investments you made with Grove Point Investments (H. Beck) or if you believe that you have been the victim of securities fraud, The White Law Group may be able to help.  To contact the firm, please call 888-637-5510     

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.           

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.            

With over 30 years of securities law experience, including experience working at FINRA and the SEC, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses.            

Although our offices are in Seattle, Washington and Chicago, Illinois, the firm reviews securities fraud cases throughout the country. For more information on The White Law Group, please visit https://whitesecuritieslaw.com.