business forward

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

To print this article, all you need is to be registered or login on

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

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

POPULAR ARTICLES ON: Finance and Banking from United States

LIBOR Transition Update

Proskauer Rose LLP

This LIBOR transition update, directed primarily at private credit lenders, provides a recap of recent trends and reflects new developments on the eve of LIBOR transition for banks, including new SOFR