by Pam Martens and Russ Martens at Wall Street on Parade
Yesterday, just hours before Sam Bankman-Fried was arrested in the Bahamas at the request of Damian Williams, the U.S. Attorney for the Southern District of New York, Wall Street On Parade learned that Bankman-Fried had been allowed to purchase an SEC-registered retail brokerage firm in August of last year.
The brokerage firm at that time was called RJL Capital Group and was based in Staten Island, New York. Bankman-Fried changed the firm’s name to FTX Capital Markets LLC and moved its headquarters to Broad Street in the financial district in lower Manhattan.
According to Wall Street’s self-regulator, FINRA, FTX Capital Markets was licensed to conduct retail stock trading in 32 states. FINRA further notes that the firm’s SEC registration is “pending withdrawal” as of December 5 and all 32 state licenses are listed as “Termination Requested.” It is not clear if the firm has requested the withdrawal of its licenses and registration or if a regulator has initiated the action. (The SEC filed a broad range of charges this morning against Sam Bankman-Fried but it makes no mention of his ownership of a retail brokerage firm. The U.S. Attorney’s office is expected to unseal its indictment against Bankman-Fried later this morning.)
Wall Street On Parade reached out to FINRA to learn if the brokerage accounts are moving to another firm and how many customer accounts were held at FTX Capital Markets. We have not yet heard back.
We also contacted the Securities Investor Protection Corporation (SIPC),…