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A broker-dealer settled FINRA charges for violating minimum net capital requirements and for failing to comply with books and records rules.
According to FINRA, the broker-dealer did not notify the SEC or FINRA regarding its failure to maintain the required minimum net capital over a 26-day period. As a result, the broker-dealer violated SEA Rule 15c3-1 ("Net Capital Requirements for Brokers or Dealers"), SEA Rule 17a-11 ("Notification Provisions for Brokers and Dealers"), FINRA Rule 4110(b) ("Capital Compliance") and FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade").
FINRA also claimed that the broker-dealer violated SEA Rule 17a-3 ("Records to Be Made by Certain Exchange Members, Brokers and Dealers"), SEA Rule 17a-5 ("Reports to Be Made by Certain Brokers and Dealers"), FINRA Rule 4511 ("General Requirements") and FINRA Rule 2010 ("Standards of Commercial Honor and Principles of Trade") due to its failure (i) to file accurate quarterly FOCUS reports, and (ii) to make and preserve accurate books and records regarding its balance sheets, trial balances, general ledgers and net capital computations.
To settle the charges the broker-dealer agreed to a (i) censure and (ii) $25,000 fine.
Primary Sources
Originally published June 18, 2020.
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