Allied Beacon confirms arbitration loss, net capital violation

Allied Beacon Partners Inc. on Monday confirmed that it lost an arbitration case with Finra, costing it $1.6 million and causing it to fall below required minimum net capital levels, which, the company said, severely restricts its business.
“Management of Allied Beacon attempted to negotiate a settlement with the arbitration claimants within the two-business-day mandatory time limitation imposed by the SEC, but was unsuccessful in doing so by the close of business on May 28,” Allied Beacon parent Beacon Acquisition Partners Inc. said in a statement.
Last Friday, InvestmentNews reported on the arbitration award and the net capital violation.
The company also confirmed that its registered representatives are looking to join another broker-dealer.
“Management of Allied Beacon is of the view that it can no longer carry on business as an active broker-dealer,” the company said in the statement. “Because Allied Beacon is unable to provide broker-dealer services, Allied Beacon’s Finra-registered representatives cannot continue their business activities as representatives of Allied Beacon and are seeking to become Finra-registered representatives of another Finra-member broker-dealer.”
The company said it was considering appealing the Financial Industry Regulatory Authority Inc.’s arbitration panel award, but that the appeal process takes time and is expensive, and that even if the company won an appeal, it wouldn’t have brokers left to rekindle the business.