A Registered Principal in Mercerville, NJ, agreed to a $10K fine and 10-day suspension as a FinOp, to settle FINRA charges he failed to fully accrue a $325,000 liability on his member firm’s ledgers and other records - i.e., a customer arbitration settlement against the firm.  Instead, liabilities were accrued only when payment was due, and hadn't booked an unpaid portion of the settlement - $125,000 - as a liability. 

Acting through CFO Duffy, the firm failed to properly and accurately track assets, liabilities and expenses.  This led to it failing to maintain its minimum net capital requirement.  Duffy was principally responsible for the deficiencies:

- e.g., (i) funds received from private placements, that were deposited in an escrow account of a separate but related company, were incorrectly counted as good capital by Duffy, and counted as good fund before the funds were actually legally and physically available to firm. 

(ii) while Duffy was aware of past delays in the firm’s ability to access funds deposited in  escrow, he didn't take into account the possibility of delays when estimating the firm’s net capital position, and during that time period, was only performing a month-end formal  computation of new capital after requisite capital was actually infused. 

This is FINRA Case #2008013287601.  [Disc. Actions for February]