Capitol Securities Management – Glen Allen, VA
According to Investment News yesterday, a Financial Industry Regulatory Authority Inc. arbitration panel has awarded two retired schoolteachers a total of $2.38 million for allegations of excessive trading, unauthorized fund transfers and withdrawals, and fraud.
According to the award, the respondent was Capitol Securities Management of Glen Allen, Va., who reportedly employed the claimants’ broker.
The claimants, Janice Patin of Louisiana and Beryl Lakin of Virginia, became clients of Capitol Securities in 2009, when Patin’s nephew who was a registered representative moved to the firm’s office in Reston, Virginia.
According to the FINRA arbitration award, there was evidence of numerous trading alerts in the claimants’ accounts that were reviewed and coded “unsolicited.”
Patin’s account was reportedly coded “long-term growth, risk level moderate” yet there were numerous alleged short-term trades, high margin balances, transfers out to other Capitol accounts and excessive commissions.
In March 2017, FINRA said Capitol fired the financial advisor in question, who shortly after reportedly mailed letters to each party confessing to years of alleged thefts from claimants’ and others’ accounts.
According to FINRA, the financial advisor reportedly committed suicide, leaving a confession letter estimating that Patin and Lakin lost $1.5 million through this alleged fraudulent activity, and the advisor purportedly profited by some $200,000 over six-plus years, in addition to commissions he received on unauthorized trades.
Failure to Supervise
Brokerage firms are required to adequately supervise their advisors. They must ensure they are complying with FINRA rules.
When brokers abuse client accounts and conduct transactions that violate securities laws, the brokerage firm they are working with may be liable for investment losses. Brokerage firms that fail to monitor the business activities of their employees may be liable for investment losses due to negligent supervision for the misconduct of their employees.
The brokerage firms can be held responsible for any losses in a FINRA arbitration claim if it is determined that they failed to properly supervise their agent.
If you are concerned about your investments with Capitol Securities Management, the securities attorneys at The White Law Group may be able to help you. For a free consultation with a securities attorney, please call our offices at 888-637-5510.
The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm with offices in Chicago, Illinois and Vero Beach, Florida.
For more information on The White Law Group, please visit our website at https://www.whitesecuritieslaw.com.