On Jul. 16, FINRA fined Capitol $100k for unsuitable fund advice.
- Capitol Securities Management, fined $100k, with $44.7k restitution to clients.
- For conducting unsuitable short-term trading, in unit investment trusts (UITs).
Unsuitable Trades
- Failed to establish supervisory system to prevent unsuitable short-term trades.
- Did not enforced UIT switch form per policy, to detect premature sales of UITs.
- There was no surveillance or exception reports that detected unsuitable trades.
- Brokers recommended and made short-term trades in their customer accounts.
- Recommended customers use proceeds to buy UTI with same investment goal.
- As result of trading, customers paid excess sales charges in amount of $44.7k.
- Firm did not retain instant message of employees, managers, compliance staff.
