Capitol Securities recently entered into a Letter of Acceptance, Waiver and Consent (AWC) with the Financial Industry Regulatory Authority (FINRA). FINRA fined Capitol Securities $470,000 for supervision, its anti-money laundering program and the alleged unsuitable sales of Reverse Convertible Notes. According to the AWC, from January 1, 2008 until August 31, 2011, a registered representative of Capitol Securities recommended and effected 24 unsuitable purchases of customized Reverse Convertible Notes totaling $4 million in the accounts of eight customers. Capitol Securities also allegedly failed to apply sales charge discounts to eligible Unit Investment Trusts (UITs) and mutual fund purchases. According to the AWC, “Many of the customers were over the age of 60 and had modest or conservative investments objectives and risk profiles. Furthermore, all of the customers’ accounts were heavily concentrated in RCNs, with the amounts of these investments constituting a substantial portion of their net worth. The recommendations were unsuitable given the customers’ risk tolerance, investment objectives, ages and net worth.”
A brokerage firm must supervise its representatives so that they do not recommend unsuitable investments, such as the registered representative with Capitol Securities. We bring claims against firms such as Capitol in the FINRA arbitration forum on a contingency fee basis to recover investment losses for investors. Please call our Chicago-based securities law firm today to speak to an attorney for free about your options.