Moody Capital Solutions, Inc has agreed to pay a $50,000 fine as part of a settlement with the Financial Industry Regulatory Authority (FINRA) addressing supervisory and anti-money laundering (AML) deficiencies over several years. In addition to the monetary penalty, the firm consented to a censure and an undertaking.
According to the settlement, from January 2020 to May 2023 Moody Capital failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with FINRA rules governing outside business activities (OBAs) and outside securities accounts. FINRA found that these failures constituted violations of FINRA Rules 3110 and 2010.
FINRA also determined that between January 2020 and December 2022 the firm did not evaluate 23 outside business activities disclosed by its registered representatives. This conduct was found to be in violation of FINRA Rules 3270.01 and 2010, which require firms to review and consider such activities for potential conflicts and regulatory concerns.
AML program and testing deficiencies
The settlement further states that from January 2020 to June 2023 Moody Capital's AML program was not reasonably designed to achieve compliance with Customer Identification Program (CIP) and Customer Due Diligence (CDD) requirements. FINRA concluded that the firm’s program did not adequately address the requirements applicable to its business activities during this period.
In addition, from 2020 to the present, the firm did not conduct independent tests of its AML program. FINRA found this to be a violation of FINRA Rules 3310 and 2010, which require member firms to subject their AML programs to independent testing to ensure effectiveness and compliance.
Firm background and business activity
Moody Capital has been a FINRA member since February 1985. The firm’s sole office is located in Atlanta, Georgia, and it currently has six registered representatives. Moody Capital engages in an investment banking business, including acting as a placement agent for private placements of securities to investment funds and accredited investors.
The settlement resolves FINRA’s findings regarding Moody Capital’s supervisory framework, its handling of outside business activities and outside securities accounts, and the design and testing of its AML program. The firm agreed to the sanctions, including the $50,000 fine, censure, and undertaking, without the use of any information beyond what is set out in the settlement summary.
