Velocity Capital, LLC Review: FINRA Sanctions and What Investors Should Know

Velocity Capital, LLC Review: FINRA Sanctions and What Investors Should Know

Velocity Capital, LLC (CRD #171810) is a New York-based broker-dealer regulated by the Financial Industry Regulatory Authority (FINRA).

In 2026, FINRA sanctioned Velocity Capital for supervisory and compliance failures spanning several years. While the firm consented to the findings without admitting or denying them, the regulatory action highlights issues that can directly impact retail investors.

Below, we break down what happened and what it could mean for customers.

Summary of FINRA’s Findings

According to FINRA’s Letter of Acceptance, Waiver, and Consent (AWC), Velocity Capital was censured and fined $125,000 for violations occurring between 2016 and 2022.

FINRA found that the firm:

• Failed to reasonably supervise outside business activities (OBAs)

• Failed to properly oversee private securities transactions (PSTs)

• Did not maintain adequate systems to supervise and preserve certain business communications

• Failed to establish and enforce supervisory systems reasonably designed to achieve compliance with FINRA rules

The firm was also required to undertake remedial measures and certify that it improved its supervisory systems.

What Is “Selling Away” and Why Does It Matter?

Many investors are unfamiliar with the term “selling away.”

Selling away typically occurs when a financial advisor sells investments to clients outside of the brokerage firm’s supervision and approval. These transactions are often classified as:

• Private Securities Transactions (PSTs)

• Activities connected to Outside Business Activities (OBAs)

Why Is Selling Away a Problem?

Brokerage firms are required to supervise their registered representatives. That supervision helps ensure:

• Investments are suitable for customers

• Risks are properly disclosed

• Conflicts of interest are addressed

• Transactions are recorded and monitored

When an advisor engages in private securities transactions without proper oversight:

• The firm may not review the investment

• The firm may not perform due diligence

• The investment may not appear on official account statements

• Investors may have limited recourse if the investment fails

In many investor loss cases nationwide, selling away has involved high-risk private placements, promissory notes, real estate deals, or other unregistered offerings.

FINRA’s findings against Velocity Capital indicate the firm failed to reasonably supervise certain OBAs and PSTs — which can create increased risk for customers if not properly monitored.

Communication Supervision Failures

FINRA also found that the firm did not adequately supervise or preserve certain business communications on non-approved channels.

Why does that matter?

When communications are not properly monitored or retained:

• Red flags may go unnoticed

• Misrepresentations may not be detected

• Evidence may be harder to recover if a dispute arises

Supervision of electronic communications has become a major regulatory focus industry-wide, as regulators expect firms to actively monitor how representatives communicate with clients.

What Investors Can Do If They Suffer Losses

If an investor suffers losses connected to:

• Selling away

• Private securities transactions

• Undisclosed outside business activities

• Failure to supervise

They may be able to pursue recovery through FINRA arbitration.

What Is FINRA Arbitration?

FINRA arbitration is a dispute resolution process required by most brokerage account agreements. Instead of going to court, investors bring claims before a neutral arbitration panel.

Common claims include:

• Failure to supervise

• Unsuitable investment recommendations

• Misrepresentation or omission

• Selling away

• Breach of fiduciary duty

Arbitration can allow investors to seek recovery of:

• Investment losses

• Interest

• Attorneys’ fees (in some cases)

• Costs

Broker-dealers can be held responsible for failing to supervise their representatives — even if the investment occurred outside the firm — depending on the facts.

Free Consultation with The White Law Group

With offices in Seattle, Washington and Chicago, Illinois, The White Law Group represents retail investors nationwide in cases involving broker misconduct, supervisory failures, and private securities transaction losses.

If you have concerns regarding Velocity Capital complaints, regulatory sanctions, or potential investment losses, you may contact our firm for a free consultation to discuss your legal options.

FAQs

1. What did FINRA fine Velocity Capital for?

FINRA fined Velocity Capital $125,000 and censured the firm for supervisory failures related to outside business activities, private securities transactions, and inadequate supervision of certain communications.

2. What is the difference between an outside business activity and a private securities transaction?

An outside business activity (OBA) is any business activity an advisor participates in outside their brokerage employment.

A private securities transaction (PST) involves the sale of securities outside the firm’s regular course of business — often referred to as selling away. PSTs typically require written notice and approval from the brokerage firm.

3. Can I recover losses if my advisor sold me an investment outside the firm?

Possibly. Even if the investment occurred outside the firm’s official platform, brokerage firms may still be liable if they failed to properly supervise the advisor or ignored red flags. Claims are typically filed through FINRA arbitration.