FINRA Fines Arcadia Securities $40,000 Over Net Capital Violations
The Financial Industry Regulatory Authority has censured and fined Arcadia Securities LLC $40,000 following findings that the firm conducted securities business while failing to maintain required minimum net capital levels.
The enforcement action stems from a 2025 FINRA examination of the New York-based firm and was detailed in a letter of acceptance, waiver, and consent, or AWC.
According to FINRA, between October 2023 and February 2024, Arcadia conducted business on three separate days while falling below its required minimum net capital of $100,000. The deficiencies arose from the firm’s participation in three firm commitment underwritings.
Under U.S. Securities and Exchange Commission rules, broker-dealers committed to purchasing securities in an underwriting must deduct a portion of that value – known as an open contractual commitment charge – from their net capital. Firms can avoid the charge by entering into backstop agreements with other syndicate members who agree to purchase any unsold shares.
FINRA found that Arcadia’s backstop agreements were flawed due to internal calculation errors — including incorrect assessments of the firm’s total underwriting commitments — and communication breakdowns with backstop providersthat left significant portions of Arcadia’s commitments uncovered.
Because the firm lacked sufficient excess capital to absorb those uncovered charges, it experienced net capital deficiencies ranging from $157,246 to more than$9 million.
FINRA also found that from October 2023 to March 2025, Arcadia failed to maintain a reasonable supervisory system and written supervisory procedures, or WSPs, regarding net capital compliance. Specifically, the firm’s WSPs did not specify how to perform net capital computations for firm commitment underwritings or how to properly structure the backstop agreements upon which the firm relied. Arcadia updated its WSPs to address those gaps in March 2025.
Arcadia Securities accepted the findings and consented to the censure and $40,000 fine without admitting or denying the allegations.
The firm has been a FINRA member since 1998 and currently operates four branch offices with 39 registered representatives.
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