According to FINRA, Mary Christine Beslagic was assessed a deferred fine of $5,000 and suspended from association with any FINRA member firm in all capacities for two months for willfully violating Regulation Best Interest (Reg BI) by recommending that customers invest home equity loan proceeds in mutual funds.

Beslagic was aware that the customers intended to use their liquified home equity proceeds for specific purposes and that they had several near-term liquidity needs. Despite this knowledge, she recommended they invest in mutual funds.

The mutual funds began declining in value shortly after the customers purchased them. As a result, the customers had to sell a portion of their investments at a loss and take out margin loans totaling approximately $25,000 to meet their near-term liquidity needs. Beslagic's firm provided compensation to the customers totaling $24,276 for their losses.

Regulation Best Interest requires broker-dealers and their representatives to act in the best interest of their retail customers when making recommendations. This includes considering the customer's investment profile, including their liquidity needs and investment timeline.

Recommending that customers invest funds needed for near-term expenses in products that may decline in value and be difficult to liquidate without loss is inconsistent with acting in the customer's best interest.

The suspension was in effect from December 16, 2024, through February 15, 2025. Investors should ensure their financial advisors understand their liquidity needs before making investment recommendations.