Broker Dealer Settles Charges for Improper Commission Offsets and Failure to Maintain Fidelity Bond Coverage

A broker-dealer agreed to settle FINRA charges for net capital violations and failing to maintain blanket fidelity bond coverage.

According to the Letter of Acceptance, Waiver and Consent, FINRA alleged that the net capital violations arose in part because the firm did not include private placement commissions payable as deductions from its net capital until the firm itself had been paid, although its registered representatives had not agreed that they would waive payment of commissions owed them until the firm was paid.

In addition, FINRA claimed that the firm did not maintain its fidelity bond coverage.