← Broker database 2026-04-24
Andes Capital Group Fined $25,000 for Regulation Best Interest Compliance Failures
According to FINRA, Andes Capital Group, LLC was censured and fined $25,000 following an April 24, 2026 AWC. FINRA imposed a reduced fine after considering the firm's revenues and financial resources.
The firm violated Regulation Best Interest (Reg BI) by failing to maintain written policies and procedures reasonably designed to achieve compliance with Reg BI's requirements. Reg BI, which took effect in June 2020, requires broker-dealers making investment recommendations to retail customers to act in those customers' best interests and to establish and enforce policies and procedures designed to achieve that standard.
Until June 2024—four years after Reg BI took effect—the firm's written procedures described Reg BI only in general terms without specifying how its representatives would fulfill their obligations under each of Reg BI's four component obligations (the Disclosure, Care, Conflict of Interest, and Compliance Obligations) or how the firm would supervise for compliance. When the firm updated its procedures in June 2024, the revisions still did not adequately describe how representatives would meet those obligations or how the firm would identify, disclose, and mitigate applicable conflicts of interest.
Additionally, the firm failed to timely file required documents with FINRA in connection with six private placement offerings. These filings were submitted between five days and thirteen months late, and in three cases, the firm made the required filings only after receiving notice from FINRA that the documents were missing.
Private placements are complex, illiquid investments typically available only to accredited investors. Timely regulatory filings are essential to FINRA's ability to review these offerings and protect investors from potentially unsuitable or problematic transactions.
Investors should be aware that smaller advisory firms are not exempt from Reg BI's obligations. When working with any broker-dealer, you have the right to understand how your broker manages conflicts of interest and how the firm supervises its representatives to ensure recommendations serve your best interests.