According to FINRA, USCA Securities LLC has been censured and fined $75,000 for conducting a securities business on 35 days while failing to maintain its minimum required net capital.

The firm incurred net capital deficiencies because it inaccurately calculated its aggregate indebtedness and net capital when participating in firm commitment offerings as a co-manager or selling group member. Later deficiencies occurred because the firm misstated certain allowable assets, including intercompany receivables, non-allowable commissions receivable, and account balances. Additional deficiencies arose when an employee transferred money from the firm's bank account to the parent company's account.

The firm also maintained inaccurate books and records and filed inaccurate FOCUS reports, overstating net capital by amounts ranging from $38,965 to $1,020,734.

The firm's supervisory system was also deficient. While procedures assigned the FINOP responsibility for calculating net capital, there was no written guidance on how and when calculations should be performed in connection with firm commitment offerings. The procedures also failed to place limitations on fund transfers outside the firm or require FINOP review of such transfers.

Net capital requirements exist to ensure that broker-dealers have sufficient liquid assets to meet their obligations to customers. When firms operate below required net capital levels, customer assets may be at risk if the firm fails. This case demonstrates how complex transactions and inadequate controls can lead to net capital violations.

Investors should be aware that FINRA's net capital rules are a crucial protection. Firms that repeatedly violate these requirements may pose elevated risks to customer funds.