Cape Securities: 2 Regulatory Complaints
Public records provided by the Financial Industry Regulatory Authority (FINRA) and accessed on June 11, 2019 indicate that Georgia-based brokerage firm Cape Securities has received regulatory sanctions. Fitapelli Kurta is interested in hearing from investors who have complaints regarding Cape Securities (CRD# 7072).
Established in North Carolina in 1976, Cape Securities is headquartered in McDonough, Georgia and registered with 52 US states and territories. It conducts 12 types of business, including: Broker or dealer retailing corporate equity securities over-the-counter; broker or dealer selling corporate debt securities; mutual fund retailer; municipal securities retailer; broker or dealer selling variable life insurance or annuities; put and call broker or dealer or option writer; broker or dealer selling securities of non-profit organizations; and private placement of securities. It conducts 15 types of business, including: Mutual fund underwriter or sponsor; mutual fund retailer; US government securities broker; municipal securities broker; real estate syndicator; investment advisory services; non-exchange member arranging for transactions in listed securities by exchange member; and private placement of securities. According to its BrokerCheck report, it has received two regulatory sanctions.
In 2015 FINRA sanctioned the firm in connection it failed in its supervisory duties so as to identify and prevent fraudulently conduct by its representatives. FINRA’s findings alleged specifically that the firm’s supervisory protocols failed to address the review and monitoring of the transmission of funds from client accounts to an external bank and/or third party accounts. FINRA’s findings also stated that one of its representatives engaged in the conversion of funds for his own use, and that this represented reaped personal benefits from from the accounts of seven firm customers. FINRA’s findings state specifically that this representative submitted wire transfer requests exceeding $690,000 in funds, purportedly on behalf of the clients although none of them had authorized the transactions in question. According to FINRA’s findings, the firm’s anti-money laundering system was not properly designed to identify and provide for the reporting of potentially suspicious wire transfer, and that following the representative’s admission of submitting a forged signature on a third-party wire transfer request, the firm did not complete any further investigation into other the representative’s other such requests. It also allegedly failed to establish any additional supervision of the customer, or have supervisory procedures that provided for the review of actively traded accounts. FINRA stated that despite signs of excessive trading in at least 15 customer accounts, the firm did not look into whether such activity was suitable, and additionally did not require any disclosures to the customers of the risks of such activity, or even contact those customers concerning such. In connection with these and other findings, the firm was censured and issued a fine of $125,000.
In 1980 the National Association of Securities Dealers sanctioned the firm in connection to allegations it did not keep accurate net capital records or maintain complete records of its options trades with clients “on a full disclosed trade.” The firm was censured and issued a fine of $250.
If you or someone you know has lost money investing with Cape Securities, call Fitapelli Kurta at 877-238-4175 for a free consultation. You may be eligible to recoup your losses. Fitapelli Kurta accepts all cases on a contingency basis: we only get paid if and when you collect money. Time to file your claim may be limited, so we encourage you to avoid delay. Call 877-238-4175 now to speak to an attorney for free.