Brokerage Firm Review: Capitol Securities Management, Inc.

Information for Current and Former Clients of Capitol Securities Management, Inc.

capitol-securities-management-inc-complaintsCapitol Securities Management, Inc. (CRD#: 14169/SEC#: 801-41033,8-30353) is a broker-dealer and investment advisory firm that is headquartered in Glen Allen, Virginia.

Capitol Securities Management is regulated by both the SEC and FINRA. According to BrokerCheck, this brokerage firm has ten disclosures on its securities industry record, including 8 regulatory events and 2 arbitration proceedings.

At the Sonn Law Group, our investment fraud attorneys are currently reviewing complaints against Capitol Securities Management. Below, we provide a list of some of the most notable recent claims and regulatory sanctions involving this firm. In addition, our legal team also keeps a running list of complaints and news stories involving the company’s brokers and financial advisors.

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Browse Capitol Securities Management Financial Complaint and Regulatory Action News

Capitol Securities Management: Notable Investor Complaints and Regulatory Sanctions

Failure to Supervise: Unsuitable Short-Term Investments

In May of 2018, FINRA filed a complaint against Capitol Securities Management for its failure to supervise short-term unit investment trust (UITs) that were being recommended by its representatives. More specifically, FINRA determined that the broker-dealer did not have a proper supervisory system in place to detect patterns of unsuitable trading in these short-term investments.

As a result of its supervisory failures, FINRA alleged that customers of Capitol Securities were forced to pay more than $44,000 in unnecessary fees. Without admitting any fault, the broker-dealer agreed to pay a $100,000 fine plus full disgorgement and restitution.

 

Unsuitable Reverse Convertible Notes (RCNs)

In October of 2015, FINRA took enforcement action against Capitol Securities Management after determining that its representatives systematically recommended and effected unsuitable purchases of reverse convertible notes (RCNs) on behalf of its customers. Investigators found that the broker-dealer did not have a proper supervisory system in place to address this issue.

Without admitting to or denying the alleged misconduct, Capitol Securities Management consented to the findings and agreed to pay a $470,000 fine as well as $226,448.90 in financial restitution to affected clients.

 

FINRA Arbitration Award: Churning and Unauthorized Trading

In February of 2019, a FINRA arbitration panel based in New Orleans, LA held Capitol Securities Management liable for more than $2.3 million in investor losses. The underlying cause of action in this was related to a fraud scheme that was allegedly pulled off by an unnamed financial advisor who was registered with both Capitol Securities and Aegis Capital Corp.

Among other things, the unnamed representative engaged in a pattern of unauthorized transactions that defrauded investors out of a substantial amount of money. Under securities industry rules, registered brokerage firms can be held legally liable for the misconduct of their individual representatives.


At Sonn Law Group, our FINRA arbitration attorneys are proud to be leaders in the field of investment loss recovery. If you suffered significant investment losses working with Capitol Securities Management or any Capitol Securities Management advisor, we are here to help. To arrange a free, strictly confidential initial legal consultation, please contact our legal team right away.