← Broker database 2023-07-24
OCP Capital Fined $75,000 for Books and Records Violations
According to FINRA, OCP Capital, LLC was censured and fined $75,000 for maintaining inaccurate books and records and allowing an unregistered individual to perform principal functions.
The firm misclassified its majority owner's personal expenses as business expenses. The owner charged at least $28,428 of personal expenses to a business credit card, and despite firm procedures, the firm paid these expenses and misclassified them as business expenses rather than compensation to the owner. This caused the firm's general ledger to overstate business expenses and understate compensation, leading to inaccurate FOCUS reports.
The firm also allowed an unregistered individual to perform functions requiring a principal registration. This individual was engaged in management and supervision of firm employees, involved with finances, corresponded with firm personnel regarding expense, commission payment, revenue, tax, and net capital issues, and was involved in employment decisions and securities business affairs.
Additionally, the firm failed to preserve all business-related emails. The firm allowed the individual to use an outside email account to conduct securities-related business without providing a firm email address. The individual's firm-related emails were only retained when other firm personnel were copied on them.
Investors rely on accurate firm financial reporting to assess the stability and reliability of broker-dealers. This case demonstrates the importance of proper books and records maintenance and ensuring that individuals performing principal functions are appropriately registered and supervised.