Alexander Capital, L.P., a FINRA member brokerage firm headquartered in New York, New York, has been censured and fined $80,000.00 by Financial Industry Regulatory Authority (FINRA) based upon the firm’s consent to findings that it failed to supervise securities transactions to ensure that they were registered or otherwise exempt from registration. Letter of Acceptance, Waiver and Consent, No. 2014039351101 (Sept. 29, 2017).
According to the AWC, from February of 2013 to March of 2014, the firm effected the liquidations of microcap stocks for customers without making sure that they were compliant with Securities Act of 1933 Section 5; the firm failed to consider whether it had effected offers or sales of securities without either an effective registration statement or exemption from registration. The AWC referred to FINRA’s Regulatory Notice 09-05, which called upon firms to maintain adequate supervisory procedures to prevent unregistered securities distributions. The AWC stated that Alexander Capital lacked supervision systems and written supervisory procedures in that regard.
Evidently, Alexander Capital’s written supervisory procedures neglected to detail how investigations or due diligence would be performed prior to the sales of microcap securities having been effected by the firm, or how the firm would verify the effective registration of securities or determine that an exemption from registration applied. The AWC stated that the firm also never conducted an inquiry concerning the liquidity of the microcap stocks. FINRA found that Alexander Capital’s conduct was violative of FINRA Rule 2010 and NASD Conduct Rule 3010(a) and 3010(b).
FINRA Public Disclosure reveals that Alexander Capital has been subject of three regulatory actions and one customer initiated investment related claim regarding allegations of the firm’s misconduct.
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