Securities Lawyers Blog
Our law firm represents individual and institutional investors that have been mistreated by their brokers and brokerage firms, such as Apex Clearing Corporation. Many investors do not recognize broker misconduct in their accounts, and those that do are often hesitant to seek help. Broker misconduct spans many issues that violate industry rules, including unauthorized trading, breach of fiduciary duty, unsuitable asset allocation, and churning. The attorneys at Gana Weinstein LLP can analyze your accounts and investments to determine if there was misconduct in the handling of your account.
Apex Clearing is a clearing broker-dealer providing custody, clearing, execution, prime brokerage, margin lending, securities lending, and back-office services to online brokerages, wealth managers, wealth-tech companies, and professional traders, and it also registered as a futures commission merchant in 2017. Based in Dallas and owned by Apex Clearing Holdings, which is majority owned by Chicago-based PEAK6, the firm has served more than 200 fintech and brokerage clients and supported more than 13 million customer accounts as of 2021.
Apex Clearing Corporation – By the Numbers:
- CRD #: 13071
- Regulatory Events: 49
- Arbitration Events: 8
- Broker Employees: 249
Apex Clearing Corporation – In the News:
FINRA v. Apex Clearing Corporation (Case #2021072120401) – From January 2019 through June 2023, Apex entered into securities loans with certain introduced customers without having reasonable grounds to believe that the loans were appropriate for those customers because those customers did not receive a loan fee for lending their shares. In addition, from March 2021 through April 2023, the firm failed to provide many customers enrolled in its fully paid securities lending program (FPLP) with all of the written disclosures regarding the customers’ rights with respect to the loaned securities and the risks and financial impacts associated with the customers’ loans of securities required under FINRA Rule 4330. Also from January 2019 through June 2023, Apex distributed to certain of its introducing broker-dealers documents that were sent to more than five million retail investors containing misrepresentations about the compensation that those investors would receive for loans under the FPLP. Four of those introducing broker-dealers enrolled approximately five million investors, approximately 17 percent of which had securities borrowed by Apex. Finally, since at least January 2019, Apex has failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), for its FPLP reasonably designed to achieve compliance with FINRA Rule 4330. Therefore, Apex violated FINRA Rules 4330, 2210, 3110, and 2010.
FINRA v. Apex Clearing Corporation (Case #2019061642801) – The Securities and Exchange Commission adopted Rule 10b-16 (17 C.F.R. § 240.10b-16) to require that broker-dealers extending credit in margin transactions have “established procedures to assure that each customer” receives certain initial and periodic disclosures. Rule 10b-16(a)(1) requires that the initial disclosure include a written statement disclosing “the annual rate or rates of interest that can be imposed.” The initial disclosure is designed to ensure that a customer, before account opening, understands the terms and conditions under which margin interest charges will be made, and to enable the customer to compare the various credit terms available. From January 2015 through November 2019 (the “Relevant Period”), Apex failed to establish procedures reasonably designed to assure that introduced customers received the initial margin interest rate disclosures and failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with Rule 10b-16(a)(1). Apex did not have procedures to assure that introduced customers received margin interest disclosures at the time of account opening. And certain customers of Apex’s introducing firms did not receive the initial disclosure stating the annual rate or rates of margin interest that could be imposed. As a result, Apex violated SEC Rule 10b-16(a)(1) and FINRA Rules 3110(a) and (b) and 2010.
FINRA v. Apex Clearing Corporation (Case #2016049448301) – During the period June 2012 through April 2016 (the “review period”), the firm failed to comply with FINRA’s short interest reporting requirements and related supervision obligations. As a result, Apex violated FINRA Rule 4560, NASD Rule 3010 (for conduct prior to December 1, 2014) and FINRA Rule 3110 (for conduct on and after December 1, 2014), and FINRA Rule 2010.
Gana Weinstein LLP has successfully handled hundreds of customer investment disputes with their brokerage firms. Our attorneys can help you detect and uncover suspicious activity in your accounts. Our consultations are free and we welcome all inquiries.