According to FINRA, Mark Allen Brewer was fined $5,000 and suspended for 45 days in all capacities for asking a customer to designate his friend as beneficiary of her accounts in a scheme to circumvent firm policy.

After the customer's spouse passed away, she informed Brewer, whom she considered a friend, that she wanted to designate him as beneficiary of her accounts. Brewer requested firm approval to be named beneficiary, but the firm denied the request because firm policy prohibits representatives from being named as beneficiaries of customer accounts unless the customer is an immediate family member.

When the customer again expressed her wish to name Brewer as beneficiary, he declined. However, after discussing other options, Brewer suggested the customer submit applications changing her beneficiary designations to an individual who was Brewer's family friend but who had no connection to or relationship with the customer whatsoever. The customer agreed and Brewer submitted the requests to the firm.

Brewer did not disclose to the firm that the individual the customer named as beneficiary was Brewer's friend with no connection to the customer. The firm approved the beneficiary change requests based on the lack of disclosed connection between Brewer and the new beneficiary. The customer later removed Brewer's friend as beneficiary after the firm contacted her about the designation.

This conduct violated principles of just and equitable trade and firm policies designed to prevent exploitation of customers. The beneficiary designation policy exists to protect vulnerable customers from being improperly influenced by their registered representatives to name them or their associates as beneficiaries. By suggesting his friend as beneficiary and not disclosing their relationship to the firm, Brewer attempted to circumvent these investor protections.

Investors should be cautious about beneficiary designations that involve their financial advisors or people suggested by their advisors. While customers have the right to name anyone as beneficiary, they should independently consider whether such designations align with their estate planning goals and family circumstances.