FINRA Slaps Apex Clearing with 3.2M Fine

The Financial Industry Regulatory Authority (FINRA) has fined Apex Clearing Corporation 3.2 million for systemic failures in its fully paid securities lending program between 2019 and 2023. Investigators found the firm failed to ensure loan appropriateness, omitted critical risk disclosures, and distributed misleading materials to over five million retail investors.

FINRA cited violations of Rule 4330, noting Apex did not disclose that some customers received no loan fees and faced unexpected tax liabilities when borrowed shares crossed dividend dates. The regulator also faulted Apex for lacking written supervisory procedures, breaching compliance standards under Rules 3110 and 2010.

Apex agreed to the penalty without admitting or denying the findings and must enact corrective measures within 180 days, including certification by senior management. FINRA emphasized the fine reflects "significant enforcement action" necessary to address lapses in industry standards.