Florida Broker-Dealer Fined, Censured for Inadequate Supervisory System
OCP Capital, LLC (CRD #143381) is a brokerage firm based in Wellington, Florida. The broker-dealer is licensed to operate in both Florida and New York. In 2023, the Financial Industry Regulatory Authority (FINRA) announced that OCP Capital, LLC is facing a censure and a $75,000 fine for its failure to develop and implement an adequate supervisory system. Here, our Miami securities fraud lawyer provides an overview of the disciplinary action taken against the firm.
Broker-Dealer Sanctions: OCP Capital, LLC
FINRA has confirmed that OCP Capital, LLC—a Palm Beach County based brokerage firm—has been fined $75,000 and censured for its failure to maintain accurate records and the misclassification of the majority owner’s personal expenses as business expenses. Despite having some existing supervisory procedures in place, the brokerage firm failed to keep proper records. FINRA determined that OCP Capital, LLC also allowed an unregistered individual to operate in a principal role and engage in managerial and supervisory tasks—a violation of securities industry rules.
FINRA Rules for Broker-Dealers: Supervision
FINRA is a self-regulatory organization responsible for oversight of the securities industry, including license broker-dealers. There are a wide range of different FINRA regulations in place regarding supervision. Indeed, broker-dealers have comprehensive duties to ensure that their registered representatives and other associated persons are supervised. Here is an overview of the key supervisory regulations for the securities industry:
- FINRA Rule 3110 (Supervision): FINRA Rule 3110 is the principal supervisory requirement for the securities industry. Among other things, the rule requires brokerage firms to establish and maintain a system to supervise the activities of each associated person that is reasonably designed to achieve compliance with applicable securities laws and regulations.
- Written Supervisory Procedures (WSPs): Notably, broker-dealers are required to establish, maintain, and enforce written procedures to supervise the types of business in which they engage and to supervise the activities of registered representatives and associated persons. Broker-dealers that do not have proper WSPs could face sanctions.
- Designated Supervisory Principal (DSP): Consistent with FINRA regulations, broker-dealers must assign a designated principal to be responsible for supervising the activities at each office, including the conduct of each associated person. The DSP is responsible for ensuring proper supervision of all activities.
For investors, it is important to know that broker-dealers can be held legally responsible for damages caused by their failure to supervise. For example, imagine that you suffered investment losses because of the improper conduct of a registered representative. The representative’s broker-dealer may be legally liable for the investor’s losses based on the failure to supervise, potentially including the violation of FINRA Rule 3110.
Contact Our Florida FINRA Broker Negligence Lawyer Today
At Carlson & Associates, P.A., we are diligent, experienced advocates for investors. If you sustained financial losses due to broker negligence, you need an experienced attorney on your side. Contact us today to set up your fully confidential initial appointment. Our firm is committed to delivering top tier legal representation to investors.
Source:
brokercheck.finra.org/firm/summary/143381
