CapFi Financial Partners LLC
Background Of CapFi Financial Partners LLC (CRD No. 113795)
CapFi has been a member of FINRA since 2001. The Firm is headquartered in Vienna,
Virginia, and has eight registered representatives and one registered branch office.
Respondent does not have any relevant disciplinary history with the Securities and
Exchange Commission (SEC), any state securities regulators, FINRA, or any other self-regulatory organization.
Activity(s) Reported – CapFi Financial Partners LLC
FINRA Rule 4511(a) states: “Members shall make and preserve books and records as
required under the FINRA rules, the Exchange Act and the applicable Exchange Act
rules.” Section 17(a)(1) of the Exchange Act requires firms to create and maintain records
of business operations in conformity with any underlying rules set forth by the SEC.
Exchange Act Rule 17a-3 mandates that firms create and maintain “[hedgers (or other
records) reflecting all assets and liabilities, income and expense and capital accounts.”
Exchange Act Rule 17a-5 requires non-carrying, non-clearing member firms such as
CapFi to file with FINRA quarterly Financial and Operational Combined Uniform Single
(FOCUS) reports. Failing to make and preserve accurate books and records, and failing to
file accurate reports, in accordance with the above-cited laws and rules, is conduct that is
inconsistent with FINRA Rule 2010, which requires member firms to “observe high
standards of commercial honor and just and equitable principles of trade.”
From February 2016 to February 2018, MK—CapFi’s owner, CEO, and CCO—used the
firm’s credit card and bank account to pay for approximately $265,000 of his personal
expenses. MK’s personal expenses included plane tickets and lodging accommodations
for family members, as well as purchases for goods or services with no business nexus.
CapFi subsequently misclassified MK’s personal expenses as business expenses of the
firm, rather than as compensation to MK, on the firm’s general ledger, causing the firm’s
books and records and its FOCUS reports to be inaccurate. For example, for the fourth
quarter of 2016, CapFi reported business expenses of approximately $100,000 on its
general ledger and in its quarterly FOCUS report, of which approximately $75,000 were
personal expenses of MK. As a result, CapFi’s books and records, as well as its FOCUS
report, understated the amount of compensation paid to MK and overstated the firm’s
expenses.
By virtue of the foregoing, CapFi violated Section 17(a) of the Exchange Act and
Exchange Act Rules 17a-3 and 17a-5 thereunder, and FINRA Rules 4511 and 2010.
Can you expose the broker trying to trick you?
FINRA offers the free web tool BrokerCheck, which allows users to check a broker’s credentials, registration, and employment history. The disclosure part of BrokerCheck includes information on client conflicts, disciplinary proceedings, and specific financial and legal issues on the broker’s record.
Penalties And Sanctions
- A censure; and
- A fine in the amount of $15,000.
Respondent agrees to pay the monetary sanction upon notice that this AWC has been
accepted and that such payment is due and payable. Respondent has submitted an
Election of Payment form showing the method by which it proposes to pay the fine
imposed.
Respondent specifically and voluntarily waives any right to claim an inability to pay, now
or at any time hereafter, the monetary sanction imposed in this matter.
Recent Activity(s)Of The Individual/Firm
From February 2016 to February 2018, MK—the owner, CEO, and CCO of CapFi—used
the firm’s credit card and bank account to pay for approximately $265,000 of his personal
expenses. CapFi then misclassified MK’s personal expenses as business expenses of the
firm, causing the firm’s books and records to be inaccurate. Based on the foregoing,
CapFi violated Section 17(a) of the Securities Exchange Act of 1934 (Exchange Act) and
Rules 17a-3 and 17a-5 thereunder, and FINRA Rules 4511 and 2010.
How To Spot A Fraud Finance Advisor (Infographic)
Help For Victims Of CapFi Financial Partners LLC
If you have lost funds because of misrepresentation, unsuitable investment, or unsuitable investment strategy from CapFi Financial Partners LLC. Then you can take legal action and get justice. Fraud, Malpractice & dereliction of duty should not be taken lightly, especially in this industry. We highly suggest that you notify authorities or seek legal action if your financial advisor or brokerage firm fails to abide by FINRA’s rules are regulations.
Financial advisors are regulatory & legally obligated to suggest (recommend) the most suitable investments/investment strategies to their clients. Their suggestions should have their client’s best interests and should be appropriate for their client’s goals and needs. Similarly, the brokerage firm which hires financial advisors also has a regulatory & legal obligation to keep a close watch and supervise their Financial Advisors’ practices & behavior. They need to make sure that the financial advisor is not being manipulative or having an unreasonable bias towards certain investments. If the financial advisor and/or the brokerage firm breaches these duties, then the client/customer may be entitled to a full or partial recovery of their losses.
Financial advisors need to have the interest of their clients when giving suggestions related to investments and investment strategies. Reasonable basis suitability requires the advisor to do their best to analyze & identify the risks and rewards associated with their suggested investment and/or investment strategy.
