In the Matter of Chapin Davis, Inc.

Chapin Davis, Inc. allegedly conducted a securities business while net capital deficient and failed to timely file notifications of such deficiencies. The firm failed to accurately calculate its net capital using the accrual method, resulting in net capital deficiencies. In multiple instances, the firm was net capital deficient. Additionally, the firm failed to timely file same-day notifications for four net capital deficiencies, filing them between three and 46 days after discovery. The firm also allegedly failed to make and preserve accurate books and records and filed 11 inaccurate Financial and Operational Combined Uniform Single (FOCUS) reports that misstated its net capital, excess net capital, and nonallowable assets. The firm failed to establish, maintain, and enforce a supervisory system, including WSPs, reasonably designed to achieve compliance with net capital requirements, recordkeeping rules, and the Compliance Obligation of Rule 15l-1(a)(1) under the Securities Exchange Act of 1934 (Reg BI), which resulted in a failure to detect and review unsuitable recommendations for customers.

Summary generated from official Financial Industry Regulatory Authority press release