Securities Lawyers Blog
Our law firm represents individual and institutional investors that have been mistreated by their brokers and brokerage firms, such as Velocity Clearing, LLC. 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.
Velocity Clearing is a self-clearing broker-dealer and financial technology company that provides execution, clearing, custody, securities lending, stock locates, financing, prime brokerage, portfolio margin, and options clearing for correspondents, emerging hedge funds, institutions, and active traders, including through its Guardian Trading division. Founded in 2003 as a provider of securities locate services, the firm serves clients globally on a 24×6 basis and became majority owned by South Korean insurer Hanwha Life in 2025.
Velocity Clearing, LLC – By the Numbers:
- CRD #: 126588
- Regulatory Events: 19
- Broker Employees: 121
Velocity Clearing, LLC – In the News:
FINRA v. Velocity Clearing, LLC (Case #2020066741301) – From December 2019 through the present, Velocity violated FINRA Rules 3110 and 2010 by failing to establish, maintain, and enforce a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with rules prohibiting manipulative trading activity by its customers. For this violation, Velocity has agreed to a censure, a $1,000,000 fine, and an undertaking to hire an independent consultant.
FINRA v. Velocity Clearing, LLC (Case #2012032952101) – The Firm failed to ensure from the point of its inception in June 2010 through at least January 1, 2012 and, in some instances through May 2012 that it established the systems procedures and written supervisory procedures (“WSP”) required for a registered broker-dealer entity to comply with federal securities laws and FINRA rules in violation of NASD Rules 3010(a) and (b). Initially, in violation of FINRA Rules 1122 and 2010, the Firm omitted from its Continuing Membership Application (“MAP Application”) facts disclosing the source of $10 million in funds for the purchase of the broker-dealer entity as an undocumented loan to its Chief Executive Officer (“CEO”) from a statutorily disqualified individual – a material fact that required disclosure. In addition, beginning in June 2010 and for a period of 18 months thereafter the Firm failed to establish a supervisory system to adequately retain and store its electronic communications, choosing instead to conduct business-related communications through Gmail, personal email accounts and later contracting with a vendor whose systems did not store e-mail in write once read many (“WORM”) format or establish an audit system providing appropriate accountability. For this 18-month period, the Firm failed to retain and archive its electronic communications as required in violation of Section 17(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rules 17a-4(f)(2)(i) and 17a-4(f)(ii) thereunder, NASD Rule 3110 (from June 2010 through December 4, 2011) and FINRA Rule 4511 (from December 5, 2011 through December 22, 2011), and further failed to adequately supervise its electronic communications in violation of NASD rules 3010(a) and (b) and FINRA Rule 2010. The Firm similarly failed to supervise the conduct of its financial operations from the time of its inception through January 2012. Beginning in September 2010, the Firm permitted a retired individual, JC, to assist with the maintenance of its books and records on a volunteer basis. Without sufficiently vetting JC’s qualifications, the Firm provided JC with a password and thereby access to its books and records, including its trial balance and general ledger and permitted JC to make entries in those books and records. Until May 2012, the Firm’s WSPs related to its financial accounting did not address written reconciliation procedures for its trial balance and general ledger. Consequently, during this period, the Firm failed to: (i) list separately every debit and credit in its general ledger and trial balance resulting in its maintenance of inaccurate books and records; (ii) perform daily reconciliations of its general ledger and trial balance; (iii) utilize the accrual method of accounting in conducting its financial calculations; and (iv) timely establish and fund a PAIB account for brokers and dealers.
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.