September 01, 2014 11:53 PM ET

Capital Markets

Company Overview of Rafferty Capital Markets, LLC

Company Overview

Rafferty Capital Markets, LLC provides institutional securities brokerage services. It offers the United States treasury / agency debt brokerage services for primary dealers and banks; investment-grade, crossover, and high yield corporate bond brokerage services; municipal debt brokerage services; and repurchase agreements. The company also offers equities trading and prime brokerage services to hedge funds, trading groups, money managers, and investment advisors. In addition, it provides distributor services to the mutual fund industry in the United States, including underwriting of mutual fund shares, access to the fundserv system, execution of broker-dealer selling agreements, registered ...

1010 Franklin Avenue

Suite 300A

Garden City, NY 11530

United States

Founded in 1987

Phone:

516-535-3800

Fax:

516-742-6935

Key Executives for Rafferty Capital Markets, LLC

President and Chief Compliance Officer
Founder and Chief Executive Officer of Rafferty Holdings LLC
Chief Financial Officer
Chief Operating Officer
President of Rafferty Holdings LLC
Compensation as of Fiscal Year 2014.

Rafferty Capital Markets, LLC Key Developments

The Securities and Exchange Commission Charges Rafferty Capital Markets with Illegally Facilitating Trades for Unregistered Firm

The Securities and Exchange Commission charged Rafferty Capital Markets with illegally facilitating trades for another firm that wasn't registered as a broker-dealer as required under the federal securities laws. Rafferty agreed to settle the SECs charges by disgorging all of the profits it received in the arrangement with the unregistered firm plus interest and a penalty for a total of nearly $850,000. The SECs investigation is continuing. According to the SECs order instituting settled administrative proceedings, Rafferty agreed to serve as the broker-dealer of record in name only for approximately 100 trades in asset-backed securities that were actually introduced by the unregistered firm. While Rafferty held the necessary licenses and processed the trades, it was the unregistered firm that managed the business. Five of the firms employees became registered representatives with Rafferty but they performed their work in the offices of the unregistered firm, which retained sole authority over their trading decisions and determined their compensation. Rafferty had no involvement in the trading or compensation decisions while the registered representatives executed the trades through Raffertys systems on behalf of the unregistered firm. Based on the agreement, Rafferty kept 15% of the compensation generated by these trades and sent the remaining balance to the unregistered firm. Rafferty Capital Markets lent out its systems to a firm that tried to sidestep the broker-dealer registration provisions. These provisions require those involved in trading securities to adhere to the proper regulatory framework, and registrants like Rafferty must face the consequences if they fail to think carefully and help unregistered firms avoid the rules. According to the SECs order, during the course of this arrangement from May 2009 to February 2010, Rafferty did not preserve communications with its registered representatives working on behalf of the unregistered firm. Rafferty did not ensure that the unregistered firm performed such recordkeeping duties either. Due in part to Raffertys lack of recordkeeping, one of the registered representatives was able to conceal two trades from Rafferty, which caused its books and records to be inaccurate. The SECs order finds that Rafferty willfully violated Section 17(a) of the Securities Exchange Act of 1934 and Rules 17a-3(a)(1) and 17a-4(b)(4). Rafferty also willfully aided and abetted and caused the unregistered broker-dealers violation of Section 15(a) of the Exchange Act. Without admitting or denying the findings, Rafferty consented to a cease-and-desist order that censures the firm and requires the disgorgement of $637,615 as well as payment of $82,011 in prejudgment interest and a $130,000 penalty.

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