NOTE: Stipulations of Fact and Consent to Penalty (SFC); Offers of Settlement (OS); and Letters of Acceptance Waiver, and Consent (AWC) are entered into by Respondents without admitting or denying the allegations, but consent is given to the described sanctions & to the entry of findings. Additionally, for AWCs, if FINRA has reason to believe a violation has occurred and the member or associated person does not dispute the violation, FINRA may prepare and request that the member or associated person execute a letter accepting a finding of violation, consenting to the imposition of sanctions, and agreeing to waive such member's or associated person's right to a hearing before a hearing panel, and any right of appeal to the National Adjudicatory Council, the SEC, and the courts, or to otherwise challenge the validity of the letter, if the letter is accepted. The letter shall describe the act or practice engaged in or omitted, the rule, regulation, or statutory provision violated, and the sanction or sanctions to be imposed.

CP Capital Securities, Inc.
AWC/2007007145101

The Firm 

• acted as the placement agent for a contingency offering of securities:
  • failed to satisfy the minimum contingency of the offering by the closing date, 
  • failed to terminate the offering and return investor funds,
  • extended the offering period; and raised additional funds, but failed to send written reconfirmation offers to investors regarding the extension and material updates prior to the closing date, and
  • failed to establish a proper escrow account in connection with the offering and directed a premature release of investor funds from the escrow account prior to satisfying the offering contingency requirement; 
• made improper payments to nonregistered foreign entities for referrals of customers: 
  • one customer was not a foreign entity domiciled abroad, 
  • the firm did not obtain written acknowledgment of the existence of the compensation arrangement, and 
  • the firm failed to provide a descriptive document disclosing what compensation was being paid to the nonregistered foreign entities;
• failed to implement its anti-money laundering (AML) compliance program, in that it failed to monitor transactions for red flags. 
• failed to preserve email correspondence relating to its securities business for at least three years. 
• failed to timely forward an investor’s check payment for an offering to the escrow account and, as a result, the firm held customer funds while conducting a securities business and became subject to a net capital requirement that it did not satisfy. 

CP Capital Securities, Inc.: Censured; Fined $21,500