FINRA Fines Velocity Capital $125,000 Over Supervisory Failures

Velocity Capital, LLC has agreed to pay a $125,000 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA), according to a recent regulatory filing.

FINRA found that between January 2016 and November 2022, the firm failed to adequately evaluate six disclosed outside business activities and did not reasonably address warning signs indicating that certain representatives were involved in undisclosed activities. The regulator also cited deficiencies in the supervision of four private securities transactions during the same period.

In addition, from at least July 2016 to the present, Velocity Capital failed to properly supervise or retain business-related communications conducted by registered representatives on unapproved, non-firm communication platforms. FINRA said these shortcomings violated recordkeeping and supervisory requirements under federal securities laws and FINRA rules.

Alongside the monetary penalty, Velocity Capital agreed to a censure and an undertaking as part of the settlement. The firm has been a FINRA member since 2015 and is headquartered in New York. It operates four branch offices and employs around 20 registered representatives, providing securities lending and borrowing services and engaging in proprietary trading.