FINRA Fines Mid Atlantic Capital Corporation for Compliance Issues

Mid Atlantic Capital Corporation Censured and Fined

According to FINRA, Mid Atlantic Capital Corporation (CRD #10674, Pittsburgh, Pennsylvania) submitted an AWC in which the firm was censured and fined $100,000.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it failed to adequately supervise the private securities transactions of two registered representatives. The findings stated that at the time of their association with the firm, the representatives informed it about their involvement with a hedge fund.

The representatives participated in securities transactions through the hedge fund, and received compensation from it in connection with those transactions. The firm was not compensated in connection with these securities transactions. The firm was required to supervise the transactions and include them on its books and records, but failed to do so.

The firm did not recognize that the representatives’ involvement with the hedge fund constituted private securities transactions, rather than an outside business activity. The firm did not supervise the hedge fund’s transactions or portfolio activity other than by receiving monthly statements from its custodian and administrator. As a result, the firm failed to detect that, during the time they were registered through the firm, the representatives accepted new hedge fund subscriptions of approximately $1.25 million.

For FINRA’s full findings FINRA Case #2013039024401.

Mid Atlantic Capital Corporation operates as a broker dealer. The Company offers brokerage, trading, reporting, advisory, and trust services. Mid Atlantic Capital serves clients in the United States.

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This information, which is publicly available on FINRA’s website has been provided by The White Law Group.

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