Broker-Dealer Settles FINRA Charges for Special Reserve Account Deficiencies

A broker-dealer settled FINRA charges for failing to maintain a sufficient balance in its "Special Reserve Bank Account for the Exclusive Benefit of Customers" ("Special Reserve Account").

FINRA alleged that on eight separate occasions the broker-dealer violated Exchange Act Rule 15c3-3 ("Customer protection-reserves and custody of securities") by making Special Reserve Account calculations that were based on delayed cash payments to its clearing firm. As a result, FINRA stated that there were deficiencies in the broker-dealer's Special Reserve Account ranging from $2,315 to $204,494. FINRA also alleged that the broker-dealer violated Rule 15c3-3 by failing to make timely deposits into its Special Reserve Account on four other occasions, resulting in reserve deficiencies ranging between $56,000 and $58,000.

To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $15,000 fine.