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Firm Settles FINRA Charges For Net Capital Rule Violations - Finance and Banking - United States - Mondaq News Alerts

United States: Firm Settles FINRA Charges For Net Capital Rule Violations

12 January 2022

Cadwalader, Wickersham Taft LLP

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A firm settled FINRA charges for conducting a securities business while failing to maintain required minimum net capital pursuant to SEA Rule 15c3-1 ("Net capital requirements for broker dealers").

According to the Letter of Acceptance, Waiver, and Consent, FINRA found that the firm's net capital fell below the required minimum because it incurred certain legal fees. FINRA determined that the firm also (i) filed with the SEC and FINRA inaccurate notices of its net capital deficiency, and (ii) failed to maintain books and records that were accurate with respect to the firm's net capital and indebtedness.

FINRA concluded that the firm violated SEA Rule 17a-11 ("Notification provisions for brokers and dealers"), as well as SEA Rules 17a-3 ("Records to be made by certain exchange members, brokers and dealers") and 17a-5 ("Reports to be made by certain brokers and dealers"). To settle the charges, the broker-dealer agreed to (i) a censure, and (ii) a $10,000 fine.

Primary Sources

  1. FINRA AWC: Third Seven Capital LLC

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