Action against Respondent, a broker-dealer, for alleged violations of the Customer Protection Rule, hypothecation rules, and the financial reporting rule.  According to the SEC, Respondent moved cash customers’ fully paid securities to its omnibus margin account maintained at another clearing firm to meet the in-house margin requirements of that clearing firm.  The SEC further alleges that Respondent delivered fully paid securities of two cash customers to another clearing firm’s depository trust company in exchange for funds.  Finally, the SEC alleges that Respondent failed to properly segregate a customer’s excess margin securities, causing them to be loaned out by another clearing firm.  Respondent has agreed to pay a civil penalty of $80,000.

SEC Press Release