FINRA files complaint against Fusion Analytics Securities for records and net capital rules violation

Maria Nikolova

The firm allegedly conducted a securities business on 26 days during which it failed to maintain the required minimum net capital.

The Department of Enforcement of the United States Financial Industry Regulatory Authority (FINRA) has filed a complaint against Fusion Analytics Securities LLC alleging that, between September 2014 and May 2018 (the “Relevant Period”), the firm failed to comply with critical books and records and net capital rules established by the Securities and Exchange Commission (SEC) and FINRA.

The complaint, filed on April 10, 2020, alleges that Fusion Analytics Securities conducted a securities business on 26 days during which it failed to maintain the required minimum net capital.

FINRA explains that the Net Capital Rule requires each broker-dealer to maintain, at all times, a certain minimum amount of net capital. The Net Capital Rule specifies required minimum net capital depending on the type of securities business conducted by a broker-dealer.

During the Relevant Period, the Net Capital Rule required Fusion Analytics Securities to maintain $5,000 in minimum net capital; however, the Firm was required to maintain $250,000 in minimum net capital on days in which it held customers’ securities or funds without promptly forwarding them.

On 24 days between September 2014 and October 2017, the firm conducted a securities business while it failed to maintain the $250,000 minimum net capital required on those days.

The Net Capital Rule also prohibits a broker or dealer from having its aggregate indebtedness exceed 1500% of its net capital. The Aggregate Indebtedness Standard requires a broker-dealer that commenced business more than one year ago to maintain net capital at least equal to six and two-thirds percent of the sum of its aggregate indebtedness. Fusion conducted a securities business on two dates when it failed to maintain the minimum net capital required pursuant to the Aggregate Indebtedness Standard.

This way, the firm violated Section 15(c) of the Exchange Act and Rule 15c3-1 (the “Net Capital Rule”), and violated FINRA Rules 4110(b) and 2010.

In addition, the firm failed to file with the SEC and FINRA a notice of financial deficiency disclosing that it did not maintain the minimum net capital required during the following periods: September 30, 2014 through and including February 3, 2017; on January 31,2018; and on April 30, 2018. Thereby, thee firm violated Section 17(a) of the Exchange Act and Rule 17a-11, and violated FINRA Rule 2010.

Furthermore, Fusion filed inaccurate quarterly FOCUS Reports. Therefore, it violated Section 17(a) of the Exchange Act and Rule 17a-5, and violated FINRA Rules 4511 and 2010.

Finally, the firm made and preserved inaccurate balance sheets, trial balances, general ledgers, and net capital computations. Thereby, it violated Section 17(a) of the Exchange Act and Rule 17a-3, and violated FINRA Rules 4511 and 2010.

The Department of Enforcement seeks, inter alia, that one or more of the sanctions provided under FINRA Rule 8310(a), including monetary sanctions, be imposed on Fusion Analytics Services.

Read this next

Digital Assets

BlackRock digs further into crypto with metaverse ETF

BlackRock, the world’s largest asset manager with almost $10 trillion in AUM, is set to launch a new metaverse ETF to help investors securely monetize on the booming immersive version of the internet.

Digital Assets

Binance wins license in New Zealand as rival Huobi shutters derivatives

Binance, the world’s largest crypto exchange by traded volume, has obtained licenses to operate in New Zealand, even after rival Huobi shutdown derivatives trading last month due to concerns about regulations.

Retail FX

Hong Kong busts perpetrators of ‘ramp and dump’ scam

Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), has charged thirteen suspects of market manipulation in a joint operation with the local police.

Institutional FX

TradingView integrates market data from German Tradegate exchange

TradingView announced that it ‎has increased data coverage to allow its users to receive information from ‎and get free access to the intra-day and tick data from Tradegate Exchange.

Retail FX

Spotware Systems introduces Custom Push Notifications for cTrader mobile apps

Spotware Systems, a technology provider for the electronic trading industry, is introducing a new push notification feature to alert mobile users of price swings and market fluctuations through their cTrader app.

Market News

The Week Ahead: 30 September from David Madden, Market Analyst at Equiti Group

Sterling dominated the headlines last week, as there were concerns the UK government might struggle to service its debt.

Inside View

How does the quality of signal providers affect your business?

A must-have onboarding process for brokers with investment services like PAMM, MAM, or copy trading


DBS deploys Nasdaq Trade Surveillance

“The confidence that markets and our clients have in DBS as a safe and trusted banking group is anchored on our ability to detect and respond to anomalous activity, which in turn calls for a robust surveillance and prevention infrastructure.”

Industry News

SEC charges Justin Costello and David Ferraro for securities fraud and posing as billionaire veteran

The Securities and Exchange Commission charged Cannabis executive Justin Costello and David Ferraro, an associate of Costello’s, for promoting the stock of several microcap companies on social media without disclosing their own simultaneous stock sales as market prices rose.