Apex Clearing Corporation

Kurta Law is investigating recommendations made by brokers from Apex Clearing Corporation (CRD#: 13071). This firm is a FINRA-registered broker-dealer that provides services to investors introduced by other firms. Apex Clearing Corporation has headquarters in Dallas, Texas.

Apex Clearing Corporation has also operated under five other names:

• ADP Clearing & Outsourcing Services
• U.S. Clearing Corporation
• Ridge Clearing & Outsourcing Solutions
• Q & R Clearing Corporation
• Fleet Securities

Fees and Conflicts of Interest

Apex Clearing Corporation discloses the fees investors may face in its Customer Relationship Summary (Form CRS):

• Apex Clearing Corporation may receive fees from you and/or your introducing brokerage firm when you open an account.
• Your introducing broker-dealer or investment advisor will determine certain fees. If Apex Clearing Corporation is your direct broker-dealer, it will provide you with a list of account fees.
• When Apex Clearing Corporation acts as a full-service introducing broker, it may charge transaction-based fees relating to the execution of investment strategies.
• Certain investments, such as mutual funds, will charge you additional fees.
• The firm may charge you or your introducing firm account maintenance, account inactivity, and other fees.
• The firm may charge interest on payments made to you prior to the settlement date on securities sold or for securities sold that have not been delivered, or when payment has not been received by the settlement date of your purchased securities.

Investors should be aware that they will still be charged fees and commissions for the services offered by their introducing broker-dealer or investment advisory firm.

Broker-Dealer Services

Apex Clearing Corporation primarily does business as a clearing firm for an introducing brokerage firm or investment advisory firm. It offers certain brokerage services, including buying and selling investments to you and executing your investment strategies.

Apex Clearing Corporation does not provide:

• Investment advice or recommendations
• Monitoring of transactions or investments
• Investment advisory services

Regulatory Actions

Kurta Law wants investors to know that Apex Clearing Corporation’s regulatory history includes fines by FINRA and the SEC. You can access its complete disclosure of regulatory actions on its detailed BrokerCheck page.

$6 Million SEC Fine

On August 14, 2024, the Securities and Exchange Commission instituted cease-and-desist proceedings against Apex Clearing Corporation, alleging that its employees sent and received business communications by unapproved channels and that the majority of these communications were not preserved by the firm.

The SEC alleged that even supervisors and senior officers failed to comply with firm communication policies and failed to enforce them.

The SEC ordered the firm to cease and desist from violations of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-4(B)(4) thereunder. It also censured the firm and fined it $6 million.

Alleged Failure to Supervise

On December 31, 2019, FINRA filed a Letter of Acceptance, Waiver & Consent (AWC) alleging that Apex Clearing Corporation failed to establish procedures reasonably designed to ensure that introduced clients would receive initial margin interest rate disclosures upon account opening from January 2015 through November 2019.

The AWC further alleged that the firm failed to establish and enforce a system of supervision, including Written Supervisory Procedures (WSPs), to achieve compliance with SEC Rule 10b-16(a)(1). This rule requires firms to disclose interest rates to clients at the time of account opening, prior to extending credit to them.

FINRA censured Apex Clearing Corporation, fined it $250,000, and ordered the firm to review and update its systems and procedures with regard to SEC Rule 10b-16(a)(1). You can read the full AWC here.

Alleged Incorrect Short Position Reporting

On October 15, 2019, an AWC alleged that Apex Clearing Corporation failed to comply with FINRA’s short interest reporting requirements and relevant supervisory obligations from June 2012 through April 2016.

The firm was allegedly unaware that certain broker-dealers were booking short positions as Type 2 (margin), rather than as Type 1 (cash) or Type 5 (short margin), causing Apex Clearing Corporation to fail to include these short positions in its submissions to FINRA.

FINRA censured the firm and fined it $140,000. You can access the full AWC here.

How Can Investors Recover Lost Funds?

FINRA-registered brokerage firms typically require investors to use FINRA arbitration to resolve investor disputes. If you have concerns about your broker’s conduct, a securities attorney can evaluate your case and help you file a dispute.

Kurta Law Can Help

Investors who lost money working with Apex Clearing Corporation should reach out to an investment fraud lawyer for help. Our attorneys offer free case evaluations and do not charge a fee unless we win your case. Call (877) 600-0098 or email info@kurtalawfirm.com.