Proceeding Number 2007008239001
Hearing Panel Decision in Department of Enforcement v. ACAP Financial, Inc. and Gary Hume
May 3, 2011
Respondent ACAP violated Conduct Rule 2110 by selling unregistered securities in violation of Section 5 of the Securities Act of 1933. For this violation, ACAP is fined $25,000. Respondents ACAP and Hume violated Conduct Rules 3010 and 2110 by failing to reasonably supervise a registered representative in connection with the sale of unregistered securities and by failing to establish, maintain, and enforce written supervisory procedures reasonably designed to achieve compliance with the applicable securities laws and regulations. For this violation, ACAP is (1) fined $50,000, (2) required to revise its procedures to ensure that they are reasonably designed to comply with the requirements of Section 5, including but not limited to the deficiencies found in this proceeding, (3) required to retain an independent consultant to review and approve the firm’s revised procedures, and (4) suspended from the activity of receiving unregistered penny stocks, including those represented by unlegended stock certificates, and liquidating those positions, until it has implemented its revised procedures after approval by the independent consultant; and Hume is (1) fined $10,000, (2) suspended from associating with any FINRA member firm in all principal capacities for one year, and (3) required to re-qualify by examination as a principal before he re-enters the securities industry in any principal capacity.
This decision has been called for review.
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