FINRA Highlights Risks of Investing Home Equity Loan Proceeds

Posted on February 25th, 2025 at 11:20 AM
FINRA Highlights Risks of Investing Home Equity Loan Proceeds

From the desk of Jim Eccleston at Eccleston Law

FINRA issued a reminder to financial advisors to carefully consider customers’ time horizons and risk tolerance, particularly when recommending investments using funds from a home equity loan, as reported by AdvisorHub

This guidance follows a settlement involving Mary C. Beslagic, a former Edward Jones advisor, who agreed to a $5,000 fine and a two-month suspension. In the Acceptance, Waiver, and Consent (“AWC”), FINRA alleged that Beslagic improperly recommended that a married couple invest $220,000 from a home equity loan into long-term mutual funds, despite knowing that the clients planned to use the funds soon to buy a house for a family member and renovate their own home. 

Shortly after the investments were made in March 2022, the mutual funds declined in value, forcing the couple to sell part of their holdings at a loss. They also took out a $25,000 margin loan to complete their projects, according to the FINRA AWC. 

FINRA determined that Beslagic violated the SEC’s Regulation Best Interest Rule by failing to align her investment recommendations with the clients’ time horizon and liquidity needs. This violation also constituted a breach of FINRA Rule 2010, which requires advisors to maintain high standards of commercial honor.  

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, finra

Return to Archive

TESTIMONIALS

Previous
Next

If you are being bothered by the Regulators, call Eccleston Law, you won't regret it.

Rick R.

LATEST NEWS AND ARTICLES

October 30, 2025
SEC Sues Former Franchise Group CEO Over $350 Million Hedge Fund Fraud

The Securities and Exchange Commission (SEC) filed a lawsuit against Brian Kahn, former CEO of Franchise Group Inc., alleging he defrauded investors of more than $350 million in a multi-year investment adviser fraud tied to the collapse of Prophecy Asset Management (Prophecy).

October 29, 2025
FINRA Foundation Study Reveals Alarming Investor Susceptibility to Fraudulent Offers

The FINRA Investor Education Foundation (FINRA Foundation) has released preliminary findings from its upcoming report, Investors in the United States: A Report of the National Financial Capability Study.

October 28, 2025
UBS Seeks Court Order Against $1.4 Billion Florida Advisory Team Over Client Solicitation Allegations

UBS Wealth Management USA has filed a lawsuit and requested a temporary restraining order (TRO) against a $1.4 billion advisory team that recently departed to join Elevation Point, a West Palm Beach-based registered investment advisor launched just 15 months ago.